Review of Swap Data Recordkeeping and Reporting Requirements, 16689-16698 [2014-06426]
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16689
Proposed Rules
Federal Register
Vol. 79, No. 58
Wednesday, March 26, 2014
This section of the FEDERAL REGISTER
contains notices to the public of the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final
rules.
COMMODITY FUTURES TRADING
COMMISSION
17 CFR Chapter I
RIN 3038–AE12
Review of Swap Data Recordkeeping
and Reporting Requirements
Commodity Futures Trading
Commission.
ACTION: Request for comment.
AGENCY:
On January 21, 2014, the
Commodity Futures Trading
Commission (‘‘Commission’’ or
‘‘CFTC’’) announced the formation of an
interdivisional staff working group
(‘‘Working Group’’) 1 to review its swap
data reporting rules and related
provisions set forth in part 45 of the
Commission’s regulations.2 Among
other objectives, the Working Group was
asked to identify and make
recommendations to resolve reporting
challenges, and to consider data field
standardization and consistency in
reporting by market participants.
Consistent with those efforts, and
informed by the Working Group’s
analysis to date, the Commission today
requests comment on specific swap data
reporting and recordkeeping rules to
help determine how such rules are
being applied and to determine whether
or what clarifications, enhancements or
guidance may be appropriate. This
request for comment is limited to part
45 and related provisions.
DATES: Comments must be received on
or before May 27, 2014.
ADDRESSES: You may submit comments,
identified by RIN 3038–AE12, by any of
the following methods:
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SUMMARY:
1 The group includes staff from the Division of
Market Oversight, the Division of Clearing and Risk,
the Division of Swap Dealer and Intermediary
Oversight, the Division of Enforcement, the Office
of the Chief Economist, the Office of Data and
Technology, and the Office of General Counsel.
2 Press Release, CFTC to Form an Interdivisional
Working Group to Review Regulatory Reporting
(Jan. 21, 2014), available at https://www.cftc.gov/
PressRoom/PressReleases/pr6837-14.
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• CFTC Web site: Via Comments
Online, at https://comments.cftc.gov.
Follow the instructions for submitting
comments through the Web site.
• Mail: Melissa D. Jurgens, Secretary
of the Commission, Commodity Futures
Trading Commission, Three Lafayette
Centre, 1155 21st Street NW.,
Washington, DC 20581.
• Hand Delivery/Courier: Same as
‘‘Mail,’’ above.
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
Please submit your comments using
only one method. All comments must be
submitted in English, or if not,
accompanied by an English translation.
Comments may be posted as received to
https://www.cftc.gov. You should submit
only information that you wish to make
available publicly. If you wish the
Commission to consider information
that may be exempt from disclosure
under the Freedom of Information Act,
a petition for confidential treatment of
the exempt information may be
submitted according to the established
procedures in CFTC Regulation 145.9
(17 CFR 145.9).
The Commission reserves the right,
but shall have no obligation, to review,
pre-screen, filter, redact, refuse, or
remove any or all of your submission
from www.cftc.gov that it may deem to
be inappropriate for publication, such as
obscene language. All submissions that
have been redacted or removed that
contain comments on the merits of the
rulemaking will be retained in the
public comment file and will be
considered as required under the
Administrative Procedure Act and other
applicable laws, and may be accessible
under the Freedom of Information Act.
FOR FURTHER INFORMATION CONTACT:
Vincent McGonagle, Director, 202–418–
5387, vmcgonagle@cftc.gov, Stuart
Armstrong, Special Counsel, 202–418–
5095, sarmstrong@cftc.gov, Laurie
Gussow, Special Counsel, 202–418–
7623, lgussow@cftc.gov, Sebastian Pujol
Schott, Associate Director, 202–418–
5641, sps@cftc.gov, Daniel Bucsa,
Associate Director, 202–418–5435,
dbucsa@cftc.gov, Division of Market
Oversight; Brian O’Keefe, Deputy
Director, 202–418–5658, bokeefe@
cftc.gov, Eric Lashner, Special Counsel,
202–418–5393, elashner@cftc.gov,
Division of Clearing and Risk; Rajal
Patel, Special Counsel, 202–418–5261,
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rpatel@cftc.gov, Division of Swap Dealer
and Intermediary Oversight; Jeffrey
Burns, Assistant General Counsel, 202–
418–5051, jburns@cftc.gov, Office of
General Counsel, Commodity Futures
Trading Commission, Three Lafayette
Centre, 1155 21st Street NW.,
Washington, DC 20581.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
II. Request for Comment
III. Issues and Questions
A. Confirmation Data
B. Continuation Data
C. Transaction Types, Entities, and
Workflows
D. PET Data and Appendix 1
E. Reporting of Cleared Swaps
F. Other SDR and Counterparty Obligations
G. Swap Dealer/Major Swap Participant
Registration and Compliance
H. Risk
I. Ownership of Swap Data and Transfer of
Data Across SDRs
J. Additional Comment
I. Introduction
Title VII of the Dodd-Frank Wall
Street Reform and Consumer Protection
Act (the ‘‘Dodd-Frank Act’’) 3 amended
the Commodity Exchange Act (‘‘CEA’’ or
‘‘Act’’) to establish a comprehensive
new regulatory framework for swaps.
Amendments to the CEA included the
addition of provisions requiring the
retention and reporting of data regarding
swap transactions, including provisions
designed to enhance transparency,
promote standardization, and reduce
systemic risk. Section 727 of the DoddFrank Act added to the CEA new section
2(a)(13), which establishes requirements
for the real-time reporting and public
availability of swap transaction data,
and requires all swaps, whether cleared
or uncleared, to be reported to registered
swap data repositories (‘‘SDRs’’).4
Sections 723 and 729 of the Dodd-Frank
Act added to the CEA, respectively,
sections 2(h)(5) and 4r, which, among
other things, establish reporting
requirements for swaps in effect as of
the enactment of the Dodd-Frank Act, as
well as swaps entered into after such
enactment but prior to the effective date
for compliance with final swap data
3 Public
Law 111–203, 124 Stat. 1376 (2010).
also CEA section 1a(40)(E), 7 U.S.C.
1a(40)(E).
4 See
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recordkeeping and reporting rules
prescribed by the Commission.
Section 728 of the Dodd-Frank Act
added to the CEA new section 21, which
established SDRs as a new category of
registered entity in order to facilitate the
collection and maintenance of swap
data as prescribed by the Commission,
and to facilitate access to such data by
regulators.5 In addition, new section
21(b) directs the Commission to
prescribe standards for swap data
recordkeeping and reporting.6 These
standards are to apply to both registered
entities and counterparties involved
with swaps.7 CEA section 21(b) further
directs the Commission to prescribe
data standards for SDRs 8 and mandates
that such standards be comparable to
those for derivatives clearing
organizations.9 CEA section 21(c)(3)
provides that, once the data elements
prescribed by the Commission are
reported to an SDR, the SDR shall
‘‘maintain the data [prescribed by the
Commission for each swap] in such
form, in such manner, and for such
period as may be required by the
Commission.’’
After extensive consultation,
opportunities for public comment, and
coordination with foreign and domestic
regulators, the Commission added a new
part 43 to its regulations,10 which sets
forth rules for the free, real-time public
reporting of swap transaction data; new
part 45,11 which establishes swap data
recordkeeping rules, as well as rules for
the reporting of swap transaction data to
a registered SDR; new part 46,12 which
5 Regulations governing core principles and
registration requirements for, and the duties of,
SDRs are set forth in part 49 the Commission’s
regulations. See Swap Data Repositories:
Registration Standards, Duties and Core Principles,
76 FR 54538 (Sept. 1, 2011).
6 CEA section 21(b)(1)(A), 7 U.S.C. 24a(b)(1)(A),
provides that ‘‘the Commission shall prescribe
standards that specify the data elements for each
swap that shall be collected and maintained by each
registered swap data repository.’’
7 CEA section 21(b)(1)(B), 7 U.S.C. 24a(b)(1)(B),
provides that ‘‘in carrying out [the duty to prescribe
data element standards], the Commission shall
prescribe consistent data element standards
applicable to registered entities and reporting
counterparties.’’
8 CEA section 21(b)(2), 7 U.S.C. 24a(b)(2),
provides that ‘‘the Commission shall prescribe data
collection and data maintenance standards for swap
data repositories.’’
9 CEA section 21(b)(3), 7 U.S.C. 24a(b)(3),
provides that ‘‘the [data] standards prescribed by
the Commission under this subsection shall be
comparable to the data standards imposed by the
Commission on derivatives clearing organizations
in connection with their clearing of swaps.’’
10 Real-Time Public Reporting of Swap
Transaction Data, 77 FR 1182 (Jan. 9, 2012).
11 Swap Data Recordkeeping and Reporting
Requirements, 77 FR 2136 (Jan. 13, 2012).
12 Swap Data Recordkeeping and Reporting
Requirements: Pre-Enactment and Transition
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sets forth swap data recordkeeping and
reporting rules for pre-enactment
swaps 13 and transition swaps 14
(collectively, ‘‘historical swaps’’); 15 and
new part 49, which governs SDR
operations and Commission access to
SDR data (‘‘SDR Rules’’).16 Collectively,
these provisions provide the public and
market participants with an
unprecedented level of transparency
into swaps markets, create rigorous
recordkeeping and data reporting
regimes with respect to swaps, and
enable Commission oversight of swap
markets and market participants.
Swap counterparties, including those
that are required to be registered with
the Commission as swap dealers (‘‘SD’’)
or as major swap participants (‘‘MSP’’),
have swap data reporting obligations
under part 43, part 45 and part 46
(collectively, the ‘‘swap data reporting
rules’’). The swap data reporting rules
also place reporting obligations on
derivatives clearing organizations
(‘‘DCOs’’) that clear swaps; designated
contract markets (‘‘DCMs’’) that list
swaps for trading; and swap execution
facilities (‘‘SEFs’’). At present there are
over 150 potential swap data reporting
entities registered 17 with the
Swaps, 77 FR 35200 (June 12, 2012) (‘‘Historical
Swap Reporting Rule’’).
13 A ‘‘pre-enactment swap’’ is a swap entered into
prior to the enactment of the Dodd-Frank Act (July
21, 2010), the terms of which have not expired as
of the date of enactment of the Dodd-Frank Act. See
Historical Swap Reporting Rule at 35226.
14 A ‘‘transition swap’’ is a swap entered into on
or after the enactment of the Dodd-Frank Act (July
21, 2010), and prior to the applicable compliance
date for reporting historical swaps data pursuant to
part 46 of the Commission’s regulations. See
Historical Swap Reporting Rule at 35227.
15 See also part 44 of the Commission’s
regulations (Interim Final Rule for Reporting PreEnactment Swap Transactions, 75 FR 63080 (Oct.
14, 2010); and Reporting Certain Post-Enactment
Swap Transactions, 75 FR 78892 (Dec. 17, 2010)),
which established certain record retention
requirements for historical swaps, pending the
adoption of the Commission’s final rules, set forth
at part 46, regarding recordkeeping and reporting
with respect to historical swaps.
16 See SDR Rules, supra note 5.
17 For purposes of this request for comment, the
Commission uses the term ‘‘reporting entity’’ to
refer to any person, registrant or non-registrant that
has an obligation to report data pursuant to part 45
of the Commission’s regulations, including SDs,
MSPs, unregistered swap counterparties, SEFs,
DCMs, and DCOs. The Commission is also
interested in receiving responses from persons that
are complying with part 45 reporting requirements
pursuant to the terms and conditions set forth in
staff no-action relief such as clearinghouses with
no-action relief (‘‘no-action CCPs’’) or qualified
multilateral trading facilities (‘‘QMTFs’’) and
foreign boards of trade (‘‘FBOTs’’) complying with
FBOT registration regulations. See CFTC Division of
Clearing and Risk, Letter to Eurex Clearing AG, NoAction Letter No. 14–27 (Mar. 10, 2014); CFTC
Division of Market Oversight and Division of Swap
Dealer and Intermediary Oversight, Conditional NoAction Relief with respect to Swaps Trading on
Certain Multilateral Trading Facilities Overseen by
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Commission, each of which will have its
own business and data standards for
listing, executing or clearing swaps in
one or more of the five asset classes
recognized for the purposes of the swap
data reporting rules—interest rates,
credit, equity, foreign exchange, and
other commodity. In addition, swaps
data may currently be reported to any
registered SDR, each of which will also
have its own data standards.
The Commission remains committed
to the regulatory objectives set forth and
established in these rules. However, to
ensure that the swap data reporting and
SDR rules are effective, efficient, and
provide the necessary regulatory
information, the Commission requests
public comment on the questions below,
which focus on the swap data
recordkeeping and reporting
requirements of part 45 and related
regulatory provisions.
II. Request for Comment
The Commission is soliciting
comment from all interested parties
regarding part 45 and related provisions
of the swap data reporting and SDR
rules. Questions are generally grouped
according to the applicable regulatory
provision. Each series of questions
includes a brief explanatory paragraph
intended to provide context for the
questions presented. Relevant topics
include, among other things, the
reporting of primary economic terms
(‘‘PET’’), confirmation, and continuation
data; the manner in which the reporting
rules address diversity of transaction
types, business models, and data flows
present in the swaps market; the
reporting of cleared swaps; and data
ownership issues and data
harmonization.
Competent Authorities Designated by European
Union Member States, No-Action Letter No. 14–16
(Feb. 12, 2014); CFTC Division of Clearing and Risk,
Letter to ASX Clear (Futures) Pty Limited, NoAction Letter No. 14–07 (Feb. 6, 2014); CFTC
Division of Clearing and Risk, Letter to Japan
Securities Clearing Corporation, No-Action Letter
No. 13–73 (Dec. 19, 2013); CFTC Division of
Clearing and Risk, Letter to LCH.Clearnet SA, NoAction Letter No. 13–43 (July 11, 2013), CFTC
Division of Clearing and Risk, Letter to Singapore
Exchange Derivatives Clearing Limited, No-Action
Letter No. 12–63 (Dec. 21, 2012); CFTC Division of
Clearing and Risk, Letter to Japan Securities
Clearing Corporation, No-Action Letter No.12–56
(Dec. 17, 2012). Staff no-action letters (‘‘NALs’’) are
available at https://www.cftc.gov/LawRegulation/
DoddFrankAct/CurrentlyEffectiveStaffLetters/
index.htm.
The list of registered entities with reporting
obligations includes reporting entities fully
registered with the Commission and entities that
have received provisional registration and/or
temporary registration. Specifically, as of March 1,
2014, it includes 98 SDs; 23 SEFs; 18 DCMs; 15
DCOs; and two MSPs. Not all entities that are
potential swap reporting entities currently execute
or clear swaps. For example, 9 of the 15 registered
DCOs currently clear swaps.
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Commenters’ responses should
identify the specific question or subquestion that they are addressing in
each response. Responses should
consider the oversight functions
performed by the Commission,
including, but not limited to, financial
surveillance; market surveillance; risk
monitoring; and trade practice
surveillance.
III. Issues and Questions
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A. Confirmation Data (§ 45.3): What
terms of a confirmation of a swap
transaction should be reported to an
SDR as ‘‘confirmation data’’?
Part 45 requires the reporting of
required swap creation data,18 which
includes PET data 19 and ‘‘confirmation
data,’’ defined as ‘‘all of the terms of a
swap matched and agreed upon by the
counterparties in confirming the
swap.’’ 20 The Commission requests
comment on the following questions
regarding confirmation data that
memorializes the agreement of the party
to all terms of a swap.
1. What information should be
reported to an SDR as confirmation
data? Please include specific data
elements and any necessary definitions
of such elements.
a. For confirmations that incorporate
terms by reference (e.g., ISDA Master
Agreement; terms of an Emerging
Markets Trade Association (‘‘EMTA’’)),
which of these terms should be reported
to an SDR as confirmation data?
2. Should the confirmation data
reported to an SDR regarding cleared
swaps be different from the
confirmation data reported to an SDR
regarding uncleared swaps? If so, how?
3. Should the confirmation data
reported to an SDR regarding swaps that
are subject to the trade execution
requirement in CEA section 2(h)(8) be
different from the confirmation data
reported to an SDR regarding: (a) Swaps
that are required to be cleared but not
subject to the trade execution
requirement; (b) swaps that are not
subject to the clearing requirement but
that are intended to be cleared at the
time of execution; (c) swaps that are
voluntarily submitted to clearing at
some point after execution (e.g.,
backloaded trades); and (d) uncleared
swaps? If so, how?
18 17 CFR 45.1 (defining required swap creation
data as ‘‘all primary economic terms data for a swap
in the swap asset class in question, and all
confirmation data for the swap’’).
19 17 CFR 45.1 (defining primary economic terms
as ‘‘all of the data elements necessary to fully report
all of the primary economic terms of a swap in the
swap asset class of the swap in question’’).
20 17 CFR 45.1 (defining ‘‘confirmation data’’).
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4. More generally, please describe any
operational, technological, or other
challenges faced in reporting
confirmation data to an SDR.
B. Continuation Data (§ 45.4): How can
the Commission ensure that timely,
complete and accurate continuation
data is reported to SDRs, and that such
data tracks all relevant events in the life
of a swap?
Part 45 of the Commission’s
regulations defines ‘‘required swap
continuation data’’ as ‘‘all of the data
elements that must be reported during
the existence of a swap to ensure that all
data concerning the swap in the SDR
remains current and accurate, and
includes all changes to PET data
occurring during the existence of the
swap.’’ 21 A swap’s continuation data
includes all lifecycle event data if the
swap is reported using the lifecycle
reporting method,22 or all state data 23 if
the swap is reported using the snapshot
reporting method.24 In addition,
continuation data also includes all
valuation data for the swap.25
Since implementation of part 45,
market participants have raised a
number of questions with respect to
how certain events in the life of a swap
should be represented when reporting
continuation data. Divergent methods of
reporting continuation data may
introduce challenges to tracking the life
of a swap. In addition, some non-SD/
MSP counterparties have indicated that
they have sometimes encountered
difficulties in reporting continuation
data to SDRs and in accessing data
reported on their behalf by SDs and
MSPs. Accordingly, the Commission
requests comment on the following
questions regarding continuation data.
5. What processes and tools should
reporting entities implement to ensure
that required swap continuation data
remains current and accurate?
6. Swaps should be linked when new
swaps result from the assignment,
netting, compression, clearing,
novation, allocation, or option exercise
of existing swaps (or other events
wherein new swaps result from existing
swaps).
a. What is the most effective and
efficient method for achieving this link
(including information regarding the
time of the relevant event)?
b. How should reporting entities
identify the reason why two swaps are
linked (e.g., identify that swap A is
21 Id.
22 See
generally, 17 CFR 45.4.
17 CFR 45.1 (defining ‘‘state data’’).
24 See generally, 17 CFR 45.4.
25 Id.
23 See
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linked to swaps B and C in an SDR or
across multiple SDRs because swaps B
and C arose from the clearing and
novation of swap A)?
c. Aside from those events set forth in
part 45, are there other events that
require linkage between related swap
transactions?
d. How should related swaps reported
to different SDRs be linked?
i. Snapshot/State/Lifecycle Methods
(§ 45.4)
7. What are the benefits and/or
disadvantages of reporting continuation
data using: (i) The lifecycle reporting
method; and (ii) the snapshot reporting
method?
a. Are there events or information that
can be represented more effectively
using one of the reporting methods
rather than the other?
b. Should all SDRs be required to
accept both the snapshot and lifecycle
methods for reporting continuation
data?
ii. Valuation Data Reporting (§§ 45.4(b),
45.4(c), and NALs 13–34 and 12–55) 26
8. How can valuation data most
effectively be reported to SDRs to
facilitate Commission oversight? How
can valuation data most effectively be
reported to SDRs (including specific
data elements), and how can it be made
available to the Commission by SDRs?
a. Should SDs and MSPs continue to
be required by the swap data reporting
rules to provide their own valuation
data for cleared swaps to SDRs? If so,
what are the benefits and challenges
associated with this valuation reporting?
b. What challenges and benefits are
associated with unregistered swap
counterparties (both financial entities 27
and non-financial entities) reporting
valuation data for uncleared swaps to
SDRs on a quarterly basis?
iii. Events in the Life of a Swap (§ 45.4)
9. Please: (i) Identify and (ii) describe
the complete range of events that can
occur in the life of a swap. Please also
address whether, and if so how,
reporting entities should report each
such event.
a. How should events in the life of a
swap be represented in SDR data? For
26 See CFTC Division of Market Oversight,
Extension of Time-Limited No-Action Relief for
Swap Dealers and Major Swap Participants from
Compliance with Reporting Obligations Under 17
CFR 45.4(b)(2)(ii), No-Action Letter No. 13–34 (June
26, 2013); CFTC Division of Market Oversight,
Time-Limited No-Action Relief for Swap Dealers
and Major Swap Participants From Compliance
With Reporting Obligations Under 17 CFR
45.4(b)(2)(ii), No-Action Letter No. 12–55 (Dec. 10,
2013).
27 CEA section 2(h)(7)(C), 7 U.S.C. 2(h)(7)(C); see
also 17 CFR 1.3(mmm).
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example, should an ‘‘event type’’
identifier, as well as a description of the
specific event, be required?
10. Can swap data reporting be
enhanced so that the current state of a
swap in an SDR (e.g., open, cancelled,
terminated, or reached maturity) can be
determined more efficiently and, if so,
how?
a. What role should SDRs play in
auditing swaps data to help identify the
current state of a swap?
b. Should reporting entities and/or
SDRs be required to take any actions
upon the termination or maturity of a
swap so that the swap’s status is readily
ascertainable and, if so what should
those requirements be?
c. Should swaps that are executed on
or pursuant to the rules of a DCM or
SEF, but which are not accepted for
clearing and are therefore void ab initio,
continue to be reported to and identified
in SDR data? Why or why not? If so,
how? 28
i. Should the swap data reporting
rules be enhanced or further clarified to
address void ab initio swaps?
11. Should the Commission require
periodic reconciliation between the data
sets held by SDRs and those held by
reporting entities?
iv. Change in Status of Reporting
Counterparty (§ 45.8)
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12. Commission regulation 45.8
establishes a process for determining
which counterparty to a swap shall be
the reporting counterparty. Taking into
account statutory requirements,
including the reporting hierarchy in
CEA section 4r(a)(3),29 what challenges
arise upon the occurrence of a change in
a reporting counterparty’s status, such
as a change in the counterparty’s
registration status? In such
circumstances, what regulatory
approach best promotes uninterrupted
and accurate reporting to an SDR?
28 See Staff Guidance on Swaps Straight-Through
Processing (Sept. 26, 2013), available at https://
www.cftc.gov/ucm/groups/public/@newsroom/
documents/file/stpguidance.pdf; CFTC Division of
Clearing and Risk and Division of Market Oversight,
Time-Limited No-Action Relief for Swap Execution
Facilities from Compliance with Certain
Requirements of Commission Regulation 37.9(a)(2)
and 37.203(a), No-Action Letter No. 13–66 (Oct. 25,
2013).
29 See 7 U.S.C. 6r(a)(3) (providing that, with
respect to a swap in which only one counterparty
is an SD or MSP, the SD or MSP shall report the
swap; with respect to a swap in which one
counterparty is an SD and the other an MSP, the
SD shall report the swap; and with respect to any
other swap, the counterparties to the swap shall
select a counterparty to report the swap).
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C. Transaction Types, Entities, and
Workflows: Can the Swap Data
Reporting Rules be Clarified or
Enhanced to Better Accommodate
Certain Transactions and Workflows
Present in the Swaps Market?
Market participants have requested
clarification from Commission staff
regarding the appropriate manner to
report certain swap transactions and
workflows that are not explicitly
addressed in the swap data reporting
rules. Accordingly, the Commission
requests comment related to the specific
questions below.
13. Please describe all data
transmission processes arising from the
execution, confirmation, clearing, and
termination of a swap, both cleared and
uncleared. Please include in your
response any processes arising from all
relevant platforms and methods of
execution.
14. Please identify any Commission
rules outside of part 45 that impact
swap data reporting pursuant to part 45.
How do such other rules impact part 45
reporting?
15. What are the challenges presented
to reporting entities and other
submitters of data when transmitting
large data submissions to an SDR?
Please include the submission methods
utilized and the technological and
timing challenges presented.
i. Bespoke Transactions (§ 45.3,
Appendix 1 to Part 45, and NALs 13–
35, and 12–39) 30
16. Market participants have
indicated that they face challenges
electronically representing all required
data elements for swap transactions
because those elements have not yet
been incorporated into standard
industry representations (e.g., FpML,
FIXML). In particular, various market
participants have indicated that these
challenges impact reporting to SDRs.
What is the most efficient methodology
or process to standardize the data
elements of a bespoke, exotic or
complex swap, to ensure that all
required creation data is electronically
represented when reported to the SDR?
Do these challenges vary depending on
the asset class? If so, how?
30 See CFTC Division of Market Oversight,
Additional Time-Limited No-Action Relief for
Bespoke or Complex Swaps from Certain Swap Data
Reporting Requirements of Parts 43 and 45 of the
Commission’s Regulations, No-Action Letter No.
13–35 (June 27, 2013) (‘‘NAL 13–35’’); CFTC
Division of Market Oversight, Time-Limited NoAction Relief for Bespoke or Complex Swaps from
Certain Swap Data Reporting Requirements of Parts
43 and 45 of the Commission’s Regulations, NoAction Letter No.12–39 (Nov. 30, 2012) (‘‘NAL 12–
39’’).
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ii. Allocations and Compressions
(§§ 45.3, 45.4, NALs 13–01 and 12–
50) 31
17. Please describe any challenges
associated with the reporting of
allocations. How should allocation data
elements (i.e., indications of whether
swaps will be allocated, as well as the
identities of entities to which portions
of executed swaps are allocated) be
reported to SDRs?
18. How should swaps resulting from
compression exercises and risk
mitigation services be reported to, and
identified in, an SDR so that the
Commission is able to effectively review
these exercises and determine what
swaps result from a specific exercise?
a. Please describe any technological,
operational, or logistical challenges
associated with reporting of such swap
transactions.
iii. Prime Brokerage (NAL 12–53) 32
19. Please describe any challenges
associated with the reporting of prime
brokerage swap transactions (e.g.,
challenges related to transactions
executed either bilaterally or on a
platform and/or involving different asset
classes)?
iv. Commodity Trade Options (NAL 13–
08) 33
20. Under Commission regulation
32.3(b)(1), swap counterparties
generally are required to report trade
options pursuant to the reporting
requirements of part 45 if, during the
previous twelve months, they have
become obligated to report under part
45 as the reporting counterparty in
connection with any non-trade option
swaps. Under Commission regulation
32.3(b)(2), trade options that are not
otherwise required to be reported to an
SDR under part 45 are required to be
reported to the Commission by both
counterparties to the transaction
through an annual Form TO filing.
31 See CFTC Division of Clearing and Risk, NoAction Relief from Required Clearing for Swaps
Resulting from Multilateral Portfolio Compression
Exercises, No-Action Letter No. 13–01 (Mar. 18.
2013); CFTC Division of Market Oversight, TimeLimited No-Action Relief for Agents from the PostAllocation Swap Timing Requirement of
§ 45.3(e)(ii)(A) of the Commission’s Regulations,
No-Action Letter No. 12–50 (Dec. 13, 2012).
32 See CFTC Division of Market Oversight, TimeLimited No-Action Relief from (i) Parts 43 and 45
Reporting for Prime Brokerage Transactions, and (ii)
Reporting of Unique Swap Identifiers in Related
Trades under Part 45 by Prime Brokers, No-Action
Letter No. 12–53 (Dec. 17, 2012).
33 See CFTC Division of Market Oversight, Staff
No-Action Relief from the Reporting Requirements
of § 32.3(b)(1) of the Commission’s Regulations, and
Certain Recordkeeping Requirements of § 32.3(b),
for End Users Eligible for the Trade Option
Exemption, No-Action Letter No. 13–08 (Apr. 5,
2013).
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Please describe any challenges
associated with the reporting of
commodity trade options, whether
reported to an SDR or to the
Commission on Form TO.
v. Swaps Executed or Cleared on or by
FBOTs, No-Action CCPs, QMTFs, and
Other Non-Registrants/Exempt Entities
(§§ 45.3, 45.4, 45.5, and NALs 14–27,
14–16, 14–07, 13–73, 13–43, 13–33, 12–
63, and 12–56) 34
21. Are there instances in which
requirements of CFTC regulations or
reliance on exemptive or staff no-action
relief 35 result in more than one party
reporting data to an SDR regarding a
particular swap? If so, how should such
duplicative reporting be addressed?
What should be the role of the reporting
entities, as well as other submitters of
data, and SDRs in identifying and
deleting duplicative reports? What
solutions should be implemented to
prevent such duplicative reporting?
22. In addition to those entities
enumerated in Commission regulation
45.5, should other entities involved in
swap transactions also be permitted to
create unique swap identifiers (‘‘USIs’’)?
If so, please describe those situations
and the particular rationale for any such
expansion of the USI-creation authority.
23. How should data reported to SDRs
identify trading venues such as SEFs,
DCMs, QMTFs, FBOTs, and any other
venue?
vi. Inter-Affiliate Swaps (§§ 45.3, 45.4,
45.6, and NAL 13–09) 36
24. In order to understand affiliate
relationships and the combined
positions of an affiliated group of
companies, should reporting
counterparties report and identify (and
SDRs maintain) information regarding
inter-affiliate relationships? Should that
reporting be separate from, or in
addition to, Level 2 reference data set
forth in Commission regulation 45.6? 37
If so, how?
34 See
note 17, supra.
no-action letters are available at https://
www.cftc.gov/LawRegulation/DoddFrankAct/
CurrentlyEffectiveStaffLetters/index.htm.
36 See CFTC Division of Market Oversight and
Division of Clearing and Risk, No-Action Relief for
Swaps Between Affiliated Counterparties That Are
Neither Swap Dealers Nor Major Swap Participants
from Certain Swap Data Reporting Requirements
Under Parts 45, 46, and Regulation 50.50(b) of the
Commission’s Regulations, No-Action Letter No.
13–09 (Apr. 5, 2013).
37 Commission regulation 45.6 provides that level
two reference data for each swap counterparty,
consisting of the identity of the counterparty’s
ultimate parent, shall be reported into a level two
reference database. The Commission shall
determine the location of the level two reference
database by means of a Commission order that is
published in the Federal Register and on the
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35 Staff
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vii. Reliance on No-Action Relief in
General
25. To the extent that a reporting
entity is, in reliance on effective noaction relief issued by Commission staff,
reporting to an SDR in a time and/or
manner that does not fully comply with
the swap data reporting rules (e.g.,
outside reporting rules’ timeframe,
required data elements missing), how
can the reporting entity most effectively
indicate its reliance upon such noaction relief for each affected data
element?
a. Are there any other challenges
associated with the reliance on staff noaction relief with respect to compliance
with part 45? If so, please describe them
and explain how the swap data
reporting rules should address those
challenges.
viii. Post-Priced Swaps (§§ 45.3 and
45.4)
26. Under the swap data reporting
rules, are there any challenges presented
by swaps for which the price, size, and/
or other characteristics of the swap are
determined by a hedging or agreed upon
market observation period that may
occur after the swap counterparties have
agreed to the PET terms for a swap
(including the pricing methodology)? If
so, please describe those challenges.
ix. Complex Swap Transactions (NAL
14–12) 38
27. Please describe how swap
transactions such as strategies and
packages should be represented in swap
data reporting such that it enables the
Commission to effectively understand
timing and the economics of the strategy
or package and the component swap
transactions?
D. PET Data and Appendix 1 (§ 45.3 and
Appendix 1): Monitoring the Primary
Economic Terms of a Swap
Appendix 1 to part 45 sets forth a list
of minimum PET terms for swap
transactions within each of the five asset
classes. Market participants have
indicated that there are circumstances
Commission’s Web site. The order shall include
notice of the location of the level two reference
database and information concerning the procedure
and requirements for reporting level two reference
data to the database. The obligation to report level
two reference data does not apply until the
Commission has determined the location of the
level two reference database. As of March 1, 2014,
the obligation to report level two reference data
pursuant to Commission regulation 45.6 does not
apply.
38 See CFTC Division of Market Oversight, NoAction Relief from the Commodity Exchange Act
Sections 2(h)(8) and 5(d)(9) and from Commission
Regulation § 37.9 for Swaps Executed as Part of a
Package Transaction, No-Action Letter No. 14–12
(Feb. 10, 2014).
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16693
in which they face challenges in either
the initial reporting of certain PET terms
or the subsequent reporting of
modifications to these terms. Market
participants have also indicated that the
data elements included in Appendix 1
may not sufficiently reflect all necessary
economic terms for various swap
transactions.
28. Please describe any challenges
(including technological, logistical or
operational) associated with the
reporting of required data fields,
including, but not limited to:
a. Cleared status;
b. Collateralization;
c. Execution timestamp;
d. Notional value;
e. U.S. person status; and
f. Registration status or categorization
under the CEA (e.g., SD, MSP, financial
entity).
29. What additional data elements
beyond the enumerated fields in
Appendix 1 of part 45, if any, are
needed to ensure full, complete, and
accurate representation of swaps (both
cleared and uncleared)? For example,
other fields could include additional
timestamps (for each lifecycle event,
including clearing-related timestamps);
clearing-related information (identity of
futures commission merchant, clearing
member, house vs. customer origin
indication, mandatory clearing
indicator, or indication of exception or
exemption from clearing); and/or
execution-specific terms (order type or
executing broker). Responses should
consider the full range of oversight
functions performed by the
Commission, including, but not limited
to, financial surveillance; market
surveillance; risk monitoring; and trade
practice surveillance.
a. Should the Commission require
reporting of the identities, registration
status, and roles of all parties involved
in a swap transaction (e.g., special entity
(as defined in Commission regulation
23.401(c)); executing broker; or voice/
electronic systems)?
b. What, if any, additional fields
would assist the Commission in
obtaining a more complete picture of
swaps executed on SEFs or DCMs (e.g.,
order entry time; request for quote
(‘‘RFQ’’), or central limit order book
(‘‘CLOB’’), or order book; request for
cross, blocks, and other execution
method indicators or broker
identification)?
c. Are there additional data elements
that could help the Commission fulfill
its oversight obligations, as described
above?
d. Should the fact that a swap is
guaranteed be a required data element
for SDR reporting? If so, what
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information regarding the guarantee
should be reported to the SDR? What
will be the challenges presented to the
reporting party in capturing this
information?
30. Have reporting entities been
unable to report to an SDR terms or
products that they believe are required
under part 45 or related provisions? If
so, please generally describe the data
elements and/or products involved.
a. Where a single swap has more than
two counterparties, please comment on
how such information should be
provided within a single part 45
submission (i.e., one USI)?
31. Could the part 45 reporting
requirements be modified to render a
fuller and more complete schedule of
the underlying exchange of payment
flows reflected in a swap as agreed upon
at the time of execution? If so, how
could the requirements be modified to
capture such a schedule?
32. Taking into account the European
Union’s reporting rules 39 and
Commission regulation 39.19, should
the Commission require additional
reporting of collateral information? If so,
how should collateral be represented
and reported? Should there be any
differences between how collateral is
reported for cleared and uncleared
swaps?
E. Reporting of Cleared Swaps (§§ 45.3,
45.4, 45.5, and 45.8): How Should the
Swap Data Reporting Rules Address
Cleared Swaps?
The Commission has a strong
regulatory interest in monitoring
transactions and risk in both the cleared
and uncleared swap markets.
Information regarding cleared swaps
(both voluntarily cleared and required
to be cleared) comes directly to the
Commission daily in the form of
position information under Commission
regulation 39.19. In addition, pursuant
to the swap data reporting rules, cleared
swap information is reported on a
transaction basis to SDRs. The
Commission monitors the cleared swap
market on a transaction and position
basis to ensure compliance with the Act
and Commission rules, including those
associated with trade execution and
clearing and the clearing requirement in
section 2(h)(1) of the Act.
Cleared swaps currently are reported
as three separate swaps.40 Industry
39 See European Securities Markets Authority’s
European Market Infrastructure Regulation
(‘‘EMIR’’) and corresponding rules, available at
https://www.esma.europa.eu/page/EuropeanMarket-Infrastructure-Regulation-EMIR.
40 Commission regulation 39.12(b)(6) requires a
DCO to have a rule providing that once a swap is
accepted for clearing by a DCO such swap is
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convention refers to the original swap as
the ‘‘alpha’’ swap and the two equal and
opposite resulting swaps as the ‘‘beta’’
and ‘‘gamma’’ swaps. The Commission
has previously determined that the
alpha, beta, and gamma swaps, although
related, are reported as separate swaps
for purposes of part 45.41 Information
regarding the alpha, beta, and gamma
swaps in an SDR must at all times be
current and accurate and include all
changes to each swap throughout its
lifecycle.42
The Commission requests comment
on the existing cleared swaps reporting
framework. The Commission is
particularly interested in the extent to
which the reporting of cleared swaps
can be improved to: (i) Ensure
consistency across the Commission’s
regulations; and (ii) achieve efficiencies
in both the Commission’s review of
cleared swaps data and the DCOs’
reporting of information to the
Commission and SDRs. In this regard,
the Commission seeks comment on
what additional data elements, if any,
should be reported to an SDR with
respect to cleared swaps that would
provide the Commission with
information necessary to monitor and
track swaps created through clearing
and resulting positions facing the DCO.
The Commission also requests
comment related to the specific
questions below.
33. Part 45 requires the reporting of
all swaps to SDRs. The Commission
requests comment on how cleared
swaps should be reported. Specifically:
a. For swaps that are subject to the
trade execution requirement in CEA
section 2(h)(8), and ipso facto the
clearing requirement, do commenters
believe that the part 45 reporting
requirements with respect to original
swaps (alpha) should be modified or
waived, given that the two new
extinguished and is replaced by two equal and
opposite swaps. 17 CFR 39.12(b)(6).
41 See 77 FR 2136; Statement of the Commission
on the Approval of CME Rule 1001 at 6 (‘‘A cleared
swap in fact comprises three separate swaps.’’),
available at https://www.cftc.gov/ucm/groups/
public/@newsroom/documents/file/
statementofthecommission.pdf.
42 See 17 CFR 45.4(a) (‘‘[R]eporting counterparties
and derivatives clearing organizations required to
report swap continuation data must do so in a
manner sufficient to ensure that all data in the swap
data repository concerning the swap remains
current and accurate, and includes all changes to
the primary economic terms of the swap occurring
during the existence of the swap.’’); see 77 FR at
2153 (‘‘[T]he final rule requires registered entities
and reporting counterparties to report continuation
data in a manner sufficient to ensure that the
information in the SDR concerning the swap is
current and accurate, and includes all changes to
any of the primary economic terms of the swap.’’);
see also 17 CFR 49.11 (confirmation of data
accuracy).
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resulting swaps (beta and gamma) will
also be reported?
b. For swaps that are subject to the
clearing requirement, but not the trade
execution requirement, do commenters
believe that the part 45 reporting
requirements with respect to alpha
swaps should be modified or waived,
given that the beta and gamma swaps
will also be reported?
c. For swaps that are not subject to the
clearing requirement, but are intended
for clearing at the time of execution, do
commenters believe that the part 45
reporting requirements with respect to
alpha swaps should be modified or
waived, given that the beta and gamma
swaps will also be reported?
d. Please discuss whether in each of
the circumstances described above there
actually is an alpha swap.
34. In addressing the questions posed
in items 33 (a)–(d), commenters are also
requested to address how any
modifications to the reporting of cleared
swaps would be consistent with the
swap reporting requirement in CEA
section 2(a)(13)(G) and the restrictions
on CFTC exemptive authority in CEA
section 4(c)(1)(A)(i)(I).
35. Can the existing rules be improved
to more clearly represent how the
clearing process impacts reporting
obligations with respect to both the
original swap (alpha) and the two new
resulting swaps (beta and gamma)? If so,
please explain.
a. Responses should address:
i. The reporting obligations applicable
to alpha swaps;
ii. The reporting obligations
applicable to beta and gamma swaps;
iii. Who holds the reporting
obligation(s) for each swap;
iv. The reporting of the linkage of
alpha, beta, and gamma swaps; and
v. Who has the legal right to
determine the SDR to which data is
reported?
36. What steps should reporting
entities and/or SDRs undertake to verify
the absence of duplicate records across
multiple SDRs for a single cleared swap
transaction?
37. How should cleared swap data be
represented in the SDR to facilitate the
Commission’s oversight of compliance
with clearing-related rules, including
the clearing requirement (Commission
regulations 50.2 and 50.4) and straightthrough processing requirements
(Commission regulations 1.74, 23.506,
37.702(b), 38.601, and 39.12(b)(7))?
38. What reporting technique, term, or
flag is recommended to identify a
cleared swap?
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i. CDS-Clearing Related Swaps and
Open Offer (Part 45 and NALs 12–59,
13–36, and 13–86) 43
39. Swaps created by operation of a
DCO’s rules related to determining the
end-of-day settlement prices for cleared
credit default swaps (‘‘CDS’’) are also
known as ‘‘firm trades’’ or ‘‘clearingrelated swaps’’ (see NAL 13–86). How
should these swaps be reported
pursuant to the swap data reporting
rules?
40. Aside from ‘‘firm trades,’’ some
swaps may be created from ‘‘open
offer,’’ meaning there is no original
swap between two counterparties, but
only equal and opposite swaps between
each of the counterparties and the
clearinghouse. How should the swap
data reporting rules address such
swaps?
ii. DCO Reporting, Netting Processes,
and Positions (§§ 45.3 and 45.4)
emcdonald on DSK67QTVN1PROD with PROPOSALS
41. As described above, DCOs provide
position data to the Commission
pursuant to part 39 and report
transactions to SDRs pursuant to part
45. The Commission is aware of
potential overlap in these data sets.
With respect to such overlap, how can
reporting of swaps data be made more
efficient, while ensuring that the
Commission continues to receive all
data necessary to fulfill its regulatory
responsibilities?
42. For cleared swaps, how can the
netting and compression of swaps and
positions by DCOs be most effectively
represented?
a. Please provide recommendations
regarding the reporting of netting and
compression, and describe any relevant
differences in reporting of netting and of
compression.
b. Are netting and compression
different concepts in the uncleared
swaps markets versus the cleared swap
market? If so, how?
43 See CFTC Division of Market Oversight, TimeLimited No-Action Relief for Swap Dealers and
Major Swap Participants from the Reporting
Provisions of Part 45 for CDS Clearing-Related
Swaps, No-Action Letter No. 12–59 (Dec. 19, 2012);
CFTC Division of Market Oversight, Extension of
Time-Limited No-Action Relief for Swap Dealers
and Major Swap Participants from the Reporting
Requirements of Part 45 for CDS Clearing-Related
Swaps, No-Action Letter No. 13–36 (June 27, 2013);
CFTC Division of Market Oversight, Provision of
Time-Limited No-Action Relief to DCOs and their
Clearing Members from the SEF Registration
Requirement and Trading Mandate under Part 37
and from Various Reporting Requirements under
Part 45, all in Connection with CDS ClearingRelated Swaps, No-Action Letter No. 13–86 (Dec.
31, 2013).
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F. Other SDR and Counterparty
Obligations (§§ 45.9, 45.13, 45.14): How
Should SDRs and Reporting Entities
Ensure That Complete and Accurate
Information is Reported to, and
Maintained by, SDRs?
When using swaps data reported to
SDRs, the Commission must rely on the
accuracy and completeness of such data
throughout the life of a swap. Data
accuracy can be achieved through,
among other means, SDR processes
confirming the accuracy of data
submitted, data reconciliation exercises
by reporting entities, and by the prompt
reporting of errors and omissions by
reporting entities.
Commission regulation 45.14 requires
registered entities and swap
counterparties to report any errors or
omissions in data they previously
reported. Additionally, each nonreporting counterparty to a swap that
discovers an error or omission with
respect to swap data reported to an SDR
must promptly notify the reporting
counterparty of the error or omission.
Commission regulation 49.11 requires
SDRs to adopt policies and procedures
to ensure the accuracy of swap data and
to confirm the accuracy of all swap data
reported pursuant to part 45.
Commission regulation 49.11(b)
provides—in pertinent part—that a
registered SDR ‘‘has confirmed the
accuracy of swap data submitted
directly by a counterparty if the [SDR]
has notified both counterparties of the
data that was submitted and received
from both counterparties
acknowledgement of the accuracy of the
swap data and corrections for any
errors.’’
43. The Commission requests
comment that addresses whether
reporting entities face challenges with
respect to complete and accurate swap
data reporting.
44. The Commission also requests
comment regarding whether
clarifications or enhancements to swap
data reporting requirements, including
requirements relating to the reporting of
errors and omissions and requirements
for data reconciliation across reporting
entities, could facilitate accurate and
complete reporting of data to the SDRs,
as well as data maintained in the SDRs.
45. Should third-party service
providers that report part 45 data to
SDRs on behalf of reporting entities be
required to register with the
Commission?
i. Confirmation of Data Accuracy and
Errors and Omissions (§ 45.14)
46. Commission regulation 49.11(b)
requires SDRs to verify with both
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counterparties the accuracy of swaps
data reported to an SDR pursuant to part
45. What specific, affirmative steps
should SDRs take to verify the accuracy
of data submitted? Please include in
your response steps that SDRs should
take regarding data submitted by
reporting counterparties on behalf of
non-reporting counterparties who are
not participants or users of the SDR.
47. In what situations should an SDR
reject part 45 data from entities due to
errors or omissions in the data? How
should the Commission balance legal
requirements for reporting as soon as
technologically practicable and the need
for complete and accurate data?
48. All data in an SDR must be
current and accurate, and the
Commission expects SDRs,
counterparties, and registered entities to
take proactive steps to ensure data
accuracy. Are there challenges that a
reporting entity faces in confirming data
accuracy? If so, how can those
challenges most effectively be
addressed?
49. If an error or omission is
discovered in the data reported to an
SDR, what remedies and systems should
be in place to correct the data? Within
what time frame should a reporting
entity be required to identify an error in
previously reported data and submit
corrected information to an SDR?
ii. SDR Required Data Standards
(§ 45.13)
50. In addition to data harmonization,
how can reporting entities and SDRs
improve data quality and
standardization across all data elements
and asset classes within an SDR? Please
provide examples of how the
presentation of data may be
standardized, utilizing specific data
elements.
51. How should SDRs leverage the
results of data elements harmonization
to help ensure regulatory reporting is
more accurate and consistent?
52. Are there additional existing
swaps data standards (other than the
legal entity identifier (‘‘LEI’’), unique
product identifier (‘‘UPI’’) and USI) that
the Commission should consider
requiring as part of any effort to
harmonize SDR data with both domestic
and foreign regulators?
iii. Identifiers (§§ 45.5, 45.6 and 45.7)
53. Please explain your experiences
and any challenges associated with
obtaining and maintaining an LEI.
a. What additional steps can market
participants and SDRs take to help
ensure counterparties have valid LEIs?
54. What principles should the
Commission consider when designating
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a UPI and product classification system
pursuant to § 45.7?
a. Are there any commonly used
taxonomies that the Commission should
consider in connection with the
designation process? Please respond by
asset class.
55. Please explain your experiences
and any challenges associated with the
creation, transmission and reporting of
USIs.
G. Swap Dealer/Major Swap Participant
Registration and Compliance: How Can
the Commission Enhance Part 45 to
Facilitate Oversight of Swap Dealers
and Major Swap Participants?
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One Commission interest in swap
data reporting is to evaluate whether a
market participant meets the definition
of, and is required to register as, an SD
or MSP.44 The Commission can use
swap data reports to determine a market
participant’s aggregate gross notional
amount of swap transactions on a
rolling 12-month basis, taking into
account, among other things, the
definitions of SD and MSP and the
Commission’s registration
requirements.45 Additionally, swap data
reporting allows the Commission to
assess a market participant’s compliance
with the Commission’s regulations,
including, but not limited to, part 23
requirements for SDs and MSPs (e.g.,
swap confirmation,46 portfolio
compression,47 and swap processing
and clearing requirements 48).
44 17 CFR 1.3(ggg); see Further Definition of
‘‘Swap Dealer,’’ ‘‘Security-Based Swap Dealer,’’
‘‘Major Swap Participant,’’ ‘‘Major Security-Based
Swap Participant,’’ and ‘‘Eligible Contract
Participant,’’ 77 FR 30596 (May 23, 2012).
45 17 CFR 3.10; see Registration of Swap Dealers
and Major Swap Participants, 77 FR 2613 (Jan. 19,
2012).
46 17 CFR 23.501; see Confirmation, Portfolio
Reconciliation, Portfolio Compression, and Swap
Trading Relationship Documentation Requirements
for Swap Dealers and Major Swap Participants, 77
FR 55903 at 55917 (Jan. 19, 2012) (‘‘Confirmation
has been recognized as an important post-trade
processing mechanism for reducing risk and
improving operational efficiency by both market
participants and their regulators. Prudent practice
requires that, after coming to an agreement on the
terms of a transaction, parties document the
transaction in a complete and definitive written
record so there is legal certainty about the terms of
their agreement.’’).
47 17 CFR 23.503; see 77 FR at 55932 (‘‘Portfolio
compression is an important, post-trade processing
and netting mechanism that can be an effective and
efficient tool for the timely and accurate processing
and netting of swaps by market participants.’’).
48 17 CFR 23.506; see Customer Clearing
Documentation, Timing of Acceptance for Clearing,
and Clearing Member Risk Management, 77 FR
21278 at 21281 (Apr. 9, 2012) (noting that the rule
was adopted ‘‘in order to ensure compliance with
any mandatory clearing requirement issued
pursuant to section 2(h)(1) of the CEA and to
promote the mitigation of counterparty credit risk
through the use of central clearing’’).
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The Commission requests comment
on what clarifications or enhancements,
if any, should be made to the swap data
reporting rules so that it may better
monitor SDs and MSPs. The
Commission also requests comment
related to the specific questions below.
56. Should the Commission require an
SDR to aggregate the number of
transactions by an entity, and the
aggregate notional value of those
transactions, to reflect the entity’s total
swap position and its total swap activity
during a given period (e.g., for purposes
of monitoring the SD de minimis
calculation)?
57. Should data elements be reported
to the SDR to reflect whether a swap is
a dealing or non-dealing swap? If so,
how should this information be
reflected in the SDR?
58. Where transactions are executed
in non-U.S. dollar (‘‘USD’’)
denominations, should the SDR data
reflect USD conversion information for
the notional values, as calculated by the
counterparty at the time of the
transaction (rather than the conversion
taking place at the SDR)?
a. If so, how should the SDR data
reflect this information?
b. Would this answer be different
depending on the registration status of
the reporting counterparty (e.g., SD/
MSP)?
H. Risk: How Can Part 45 Better
Facilitate Risk Monitoring and
Surveillance?
Swap data reported to SDRs facilitates
a number of Commission risk
monitoring and surveillance activities,
including monitoring of both financial
and market risks resulting from the
accumulation of large positions in
cleared and uncleared swaps.
The Commission has supervisory
programs for DCOs, futures commission
merchants, SDs, MSPs, and other
participants in the clearing system.
These programs monitor market
participants’ compliance with
applicable provisions of the Act and
Commission regulations, including parts
1, 22, 23, 39, and 50. A primary concern
of these programs is to monitor and
mitigate potential risks that can arise
from swaps activities.
With respect to clearing, the
Commission conducts periodic
examinations of DCOs, and Commission
risk surveillance staff monitors, on a
daily basis, the risks posed to or by
DCOs, clearing members, and market
participants. This analysis includes
reviewing position data at the trader,
clearing member, and DCO levels.
The Commission requests comment
on what clarifications or enhancements,
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Fmt 4702
Sfmt 4702
if any, should be made to the swap data
reporting rules so that it may better
monitor risk and conduct related
surveillance. The Commission also
requests comment on the specific
questions below.
59. Should the Commission require
SDRs to calculate market participants’
positions in cleared and uncleared
swaps?
a. Given the definition of ‘‘position’’
in part 49 of the Commission’s
regulations,49 and the transactional
nature of swap data reporting, how
should an SDR calculate the positions of
market participants whose swaps are
reported to it?
i. Please explain whether these
calculations should differ by underlying
instrument, index or reference entity,
counterparty, asset class, long risk of
underlying instrument, index, or
reference entity, or short risk of the
underlying instrument, index or
reference entity, or any other attribute.
b. How should SDR positions or
position calculation methods relate, if at
all, to positions calculated by DCOs and
DCOs’ position calculation methods?
60. Are there data elements that
should be reported on a transaction
basis to identify the linkage between a
swap transaction and a reporting
counterparty’s other positions in
products regulated by the Commission?
61. How can swap data reporting be
enhanced to facilitate the calculation of
positions within SDRs?
a. How should position information
within an individual SDR be aggregated
across multiple SDRs so that the
Commission has a complete view of a
market participant’s risk profile for
swaps reportable under Dodd-Frank?
b. How can the Commission
efficiently aggregate information by
product and by market participant in
order to understand positions across
cleared and uncleared markets?
62. How can the Commission best
aggregate data across multiple trade
repositories (including registered
SDRs)?
63. What international regulatory
coordination would be necessary to
facilitate such data aggregation?
I. Ownership of Swap Data and Transfer
of Data Across SDRs
Since the adoption of the swap data
reporting and SDR rules, questions have
emerged whether a particular party or
parties have the legal authority to direct
and/or use such swap data.
Commission regulation 49.17(g)
generally prohibits a registered SDR
from using the data it maintains for
49 See
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commercial or business purposes. As
part of this prohibition, Commission
regulation 49.17(g) requires registered
SDRs to adopt and implement adequate
‘‘firewalls’’ to protect the swaps data
from any improper commercial use.
Commission regulation 49.17(g)(2)
provides a limited exception if the
submitters of the data provide express
written consent to the SDR.50
Because of the inherent conflicts in
connection with maintaining swap data
and SDR operations (e.g., the incentive
to develop ancillary services using swap
data), the Commission in part 49
required that ‘‘commercial use’’ of any
data submitted to and maintained by an
SDR be restricted. Accordingly,
Commission regulation 49.27 requires
registered SDRs to provide fair, open
and equal access to their services and
provides that registered SDRs must not
discriminate against submitters of data
regardless of whether such a submitter
has agreed to any ‘‘commercial use’’ of
its data.
The basis for prohibiting SDRs from
commercializing Core Data 51 without
the consent of the counterparties is
based on (i) the duty of the SDR set forth
in Section 21(c)(6) of the CEA to keep
swap information private and
confidential, and (ii) the inherent
conflict of interest for an SDR to use
Core Data for commercial purposes.
Core Principle 3 set forth in Section
21(f)(3) of the CEA requires SDRs to
‘‘establish and enforce rules to minimize
conflicts of interest in the decisionmaking process of the swap data
repository.’’ Commission regulation
49.17(g) permits an SDR to disclose,
consistent with Section 8 of the CEA,
aggregated data information if such
disclosure is not for a commercial
purpose. In sum, part 49 provides an
SDR with an implied license to use Core
Data for regulatory purposes, and absent
the consent of the counterparties, an
SDR would be prohibited from
commercially benefiting from the use of
such Core Data. The Commission is
requesting industry and public input on
whether the current Commission
regulations regarding
‘‘commercialization’’ of data are
50 The statutory basis for the regulation is set forth
in Sections 21(c)(6), 21(c)(7), and 21(f)(3) of the
CEA adopted as part of Section 728 of the DoddFrank Act, 7 U.S.C. 24a(c)(6), 24a(c)(7), and
24a(f)(3).
51 Core Data constitutes the two separate streams
of data received by SDRs: ‘‘(i) Data related to realtime public reporting which by its nature is
publicly available and (ii) data that is intended for
use by the Commission and other regulators which
is subject to statutory confidential treatment.’’ SDR
Rules at 54550.
VerDate Mar<15>2010
16:14 Mar 25, 2014
Jkt 232001
consistent with legal property interests
and industry practices.
Additionally, the Commission
requests comment related to the specific
questions below.
64. The Commission seeks input from
market participants regarding the
ownership of the transactional data
resulting from a swap transaction. Is the
swap transaction data from a particular
swap transaction owned by the
counterparties to the transaction?
a. If cleared, should a DCO have
preferential ownership or intellectual
property rights to the data?
b. Should ownership or intellectual
property rights change based on
whether the particular swap transaction
is executed on a SEF or DCM?
c. What would be the basis for
property rights in the data for each of
these scenarios?
d. What ownership interests, if any,
are held by third-party service
providers?
e. What are the ownership interests of
non-users/non-participants of an SDR
whose information is reported to the
SDR by a reporting counterparty or
other reporting entity?
65. Is commercialization of swap
transaction data consistent with the
regulatory objective of transparency?
a. In what circumstances should an
SDR be permitted to commercialize the
data required to be reported to it?
b. Does commercialization of swap
data increase potential data
fragmentation?
c. Is commercialization of swap data
reported to an SDR, DCM or SEF
necessary for any such entity to be
economically viable? If so, what
restraints or controls should be imposed
on such commercialization?
66. Does the regulatory reporting of a
swap transaction to an SDR implicitly or
explicitly provide ‘‘consent’’ to further
distribution or use of swap transaction
data for commercial purpose by the
SDR?
67. Even though swap data reported to
an SDR must be available for public
real-time reporting, should any use of
such real-time data or
commercialization of such data occur
only with the specific consent of the
counterparties to the swap?
68. An ancillary issue relating to
commercialization of data and legal
property rights relates to the
‘‘portability’’ of SDR data. This issue
relates to the operation of Commission
regulation 45.10 (Reporting to a single
SDR), which requires that all swap data
for a given swap must be reported to a
single SDR, specifically, the SDR to
which creation data is first reported.
The Commission did not, however,
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Fmt 4702
Sfmt 4702
16697
directly address whether the data in one
SDR may be moved, transferred or
‘‘ported’’ to another SDR.52 The
Commission seeks comment on whether
§ 45.10 should be re-evaluated and
whether a viable alternative exists.
Should portability of data be permitted?
If so, should there be agreement by the
counterparties to a swap prior to the
data being ported?
J. Additional Comment
69. To the extent not addressed by
any of the questions above, please
identify any challenges regarding: (i)
The accurate reporting of swap
transaction data; (ii) efficient access to
swap transaction data; and (iii) effective
analysis of swap transaction data. Please
address each issue and challenge as it
pertains to reporting entities, SDRs, and
others. Please also discuss how such
challenges can be resolved.
a. What challenges do Commission
registrants (SDs, MSPs, SEFs, DCMs,
and DCOs) face as reporting entities and
reporting counterparties under the swap
data reporting rules? What
enhancements or clarifications to the
Commission’s rules, if any, would help
address these challenges?
b. What challenges do financial
entities face as reporting counterparties
and non-reporting counterparties under
the swap data reporting rules? What
enhancements or clarifications to the
Commission’s rules, if any, would help
address these challenges?
c. What challenges do non-financial
entities, including natural persons, face
as reporting counterparties and nonreporting counterparties under the swap
data reporting rules? What
enhancements or clarifications to the
Commission’s rules, if any, would help
address these challenges?
Issued in Washington, DC, on March 19,
2014, by the Commission.
Christopher J. Kirkpatrick,
Deputy Secretary of the Commission.
Appendices to Request for Comment on
Part 45 and Related Provisions of the
Commission’s Swap Data Reporting
Rules
Appendix 1—Commission Voting Summary
On this matter, Acting Chairman Wetjen
and Commissioners Chilton and O’Malia
voted in the affirmative. No Commissioner
voted in the negative.
Appendix 2—Statement of Commissioner
Scott D. O’Malia
I support the request for comment on part
45 and related provisions of the
52 The Commission did provide that SDR data
could be transferred or moved to another SDR in
the case of an SDR ceasing to operate as an SDR
registered the Commission. See 17 CFR 49.4.
E:\FR\FM\26MRP1.SGM
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Federal Register / Vol. 79, No. 58 / Wednesday, March 26, 2014 / Proposed Rules
Commission’s swap data reporting rules. I
commend the cross-divisional data team’s
effort to fix our reporting rules and enhance
the Commission’s ability to use its data. I
hope that the data team and the Commission
will carefully evaluate market participants’
comments and recommendations and
develop workable solutions to improve our
data reporting regime.
At the same time, I urge market
participants to carefully review the
Commission’s questions, submit their
comments, and alert the Commission to other
data reporting issues that have not been
included in this request for comment. This
comment period is a critical step in the
Commission’s effort to improve its data
utilization. I encourage all market
participants to help the Commission improve
its data reporting regime.
[FR Doc. 2014–06426 Filed 3–25–14; 8:45 am]
BILLING CODE 6351–01–P
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Dated: March 21, 2014.
Bernadette Dunham,
Director, Center for Veterinary Medicine.
Food and Drug Administration
21 CFR Part 573
[FR Doc. 2014–06623 Filed 3–25–14; 8:45 am]
[Docket No. FDA–2014–F–0296]
BILLING CODE 4160–01–P
DSM Nutritional Products; Filing of
Food Additive Petition (Animal Use)
AGENCY:
Food and Drug Administration,
HHS.
ACTION:
The Food and Drug
Administration (FDA) is announcing
that DSM Nutritional Products has filed
a petition proposing that the food
additive regulations be amended to
provide for the safe use of 25hydroxyvitamin D3 in feed for turkeys.
DATES: Submit either electronic or
written comments on the petitioner’s
request for categorical exclusion from
preparing an environmental assessment
or environmental impact statement by
April 25, 2014.
ADDRESSES: Submit electronic
comments to: https://
www.regulations.gov. Submit written
comments to the Division of Dockets
Management (HFA–305), Food and Drug
Administration, 5630 Fishers Lane, Rm.
1061, Rockville, MD 20852.
FOR FURTHER INFORMATION CONTACT:
Isabel W. Pocurull, Center for Veterinary
Medicine, Food and Drug
Administration, 7519 Standish Pl.,
Rockville, MD 20855, 240-453-6853.
SUPPLEMENTARY INFORMATION: Under the
Federal Food, Drug, and Cosmetic Act
(section 409(b)(5) (21 U.S.C. 348(b)(5)),
notice is given that a food additive
petition (FAP 2279) has been filed by
DSM Nutritional Products, 45
emcdonald on DSK67QTVN1PROD with PROPOSALS
SUMMARY:
16:14 Mar 25, 2014
DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Food and Drug Administration
Notice of petition.
VerDate Mar<15>2010
Waterview Blvd., Parsippany, NJ 07054.
The petition proposes to amend Title 21
of the Code of Federal Regulations (CFR)
in part 573 Food Additives Permitted in
Feed and Drinking Water of Animals (21
CFR part 573) to provide for the safe use
of 25-hydroxyvitamin D3 in feed for
turkeys.
The petitioner has requested a
categorical exclusion from preparing an
environmental assessment or
environmental impact statement under
21 CFR 25.32(r). Interested persons may
submit either electronic or a single copy
of written comments regarding this
request for categorical exclusion to the
Division of Dockets Management (see
DATES and ADDRESSES). Identify
comments with the docket number
found in brackets in the heading of this
document. Received comments may be
seen in the Division of Dockets
Management between 9 a.m. and 4 p.m.,
Monday through Friday.
Jkt 232001
21 CFR Chapter I
[Docket No. FDA–2013–N–0590]
RIN 0910–AG97
Food and Drug Administration,
HHS.
Advance notice of proposed
rulemaking.
ACTION:
The Food and Drug
Administration (FDA) is issuing this
advance notice of proposed rulemaking
(ANPRM) to solicit comments, data, and
information to assist the Agency in
implementing the FDA Food Safety
Modernization Act (FSMA), which
added new provisions to the Reportable
Food Registry (RFR) requirements of the
Federal Food, Drug, and Cosmetic Act
(the FD&C Act). Under the new
provisions, FDA may require a
responsible party to also submit to FDA
‘‘consumer-oriented’’ information
regarding certain reportable foods,
including information necessary to
SUMMARY:
PO 00000
Frm 00010
Fmt 4702
Submit either electronic or
written comments by June 9, 2014.
ADDRESSES: You may submit comments,
identified by Docket No. FDA–2013–N–
0590 or Regulatory Information Number
(RIN) number 0910–AG97, by any of the
following methods:
DATES:
Electronic Submissions
Submit electronic comments in the
following way:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
Written Submissions
Implementation of the Food and Drug
Administration Food Safety
Modernization Act Amendments to the
Reportable Food Registry Provisions
of the Federal Food, Drug, and
Cosmetic Act
AGENCY:
enable a consumer to accurately identify
whether the consumer is in possession
of a reportable food. FDA must prepare
and publish on FDA’s Internet Web site
a one-page summary of the consumeroriented information that can be easily
printed by a grocery store for the
purposes of consumer notification. A
grocery store that sold a reportable food
that is the subject of an FDA one-page
summary, and that is part of a chain of
establishments with 15 or more physical
locations, is required to prominently
display the FDA one-page summary, or
the information from the summary,
within 24 hours after the one-page
summary is published on FDA’s Web
site, through a method identified by
FDA. FDA is seeking input on topics
including consumer-oriented
information submissions, consumer
notifications, posting consumer
notifications in grocery stores, and
grocery stores subject to the new
requirements.
Sfmt 4702
Submit written submissions in the
following ways:
• Mail/Hand delivery/Courier (for
paper submissions): Division of Dockets
Management (HFA–305), Food and Drug
Administration, 5630 Fishers Lane, Rm.
1061, Rockville, MD 20852.
Instructions: All submissions received
must include the Agency name and
Docket No. FDA–2013–N–0590 and RIN
0910–AG97 for this advance notice of
proposed rulemaking. All comments
received may be posted without change
to https://www.regulations.gov, including
any personal information provided. For
additional information on submitting
comments, see the ‘‘Comments’’ heading
of the SUPPLEMENTARY INFORMATION
section of this document.
Docket: For access to the docket to
read background documents or
comments received, go to https://
www.regulations.gov and insert the
docket number(s), found in brackets in
the heading of this document, into the
‘‘Search’’ box and follow the prompts
and/or go to the Division of Dockets
E:\FR\FM\26MRP1.SGM
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]]>Agencies
[Federal Register Volume 79, Number 58 (Wednesday, March 26, 2014)]
[Proposed Rules]
[Pages 16689-16698]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-06426]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 79, No. 58 / Wednesday, March 26, 2014 /
Proposed Rules
[[Page 16689]]
-----------------------------------------------------------------------
COMMODITY FUTURES TRADING COMMISSION
17 CFR Chapter I
RIN 3038-AE12
Review of Swap Data Recordkeeping and Reporting Requirements
AGENCY: Commodity Futures Trading Commission.
ACTION: Request for comment.
-----------------------------------------------------------------------
SUMMARY: On January 21, 2014, the Commodity Futures Trading Commission
(``Commission'' or ``CFTC'') announced the formation of an
interdivisional staff working group (``Working Group'') \1\ to review
its swap data reporting rules and related provisions set forth in part
45 of the Commission's regulations.\2\ Among other objectives, the
Working Group was asked to identify and make recommendations to resolve
reporting challenges, and to consider data field standardization and
consistency in reporting by market participants. Consistent with those
efforts, and informed by the Working Group's analysis to date, the
Commission today requests comment on specific swap data reporting and
recordkeeping rules to help determine how such rules are being applied
and to determine whether or what clarifications, enhancements or
guidance may be appropriate. This request for comment is limited to
part 45 and related provisions.
---------------------------------------------------------------------------
\1\ The group includes staff from the Division of Market
Oversight, the Division of Clearing and Risk, the Division of Swap
Dealer and Intermediary Oversight, the Division of Enforcement, the
Office of the Chief Economist, the Office of Data and Technology,
and the Office of General Counsel.
\2\ Press Release, CFTC to Form an Interdivisional Working Group
to Review Regulatory Reporting (Jan. 21, 2014), available at https://www.cftc.gov/PressRoom/PressReleases/pr6837-14.
---------------------------------------------------------------------------
DATES: Comments must be received on or before May 27, 2014.
ADDRESSES: You may submit comments, identified by RIN 3038-AE12, by any
of the following methods:
CFTC Web site: Via Comments Online, at https://comments.cftc.gov. Follow the instructions for submitting comments
through the Web site.
Mail: Melissa D. Jurgens, Secretary of the Commission,
Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st
Street NW., Washington, DC 20581.
Hand Delivery/Courier: Same as ``Mail,'' above.
Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments.
Please submit your comments using only one method. All comments
must be submitted in English, or if not, accompanied by an English
translation. Comments may be posted as received to https://www.cftc.gov.
You should submit only information that you wish to make available
publicly. If you wish the Commission to consider information that may
be exempt from disclosure under the Freedom of Information Act, a
petition for confidential treatment of the exempt information may be
submitted according to the established procedures in CFTC Regulation
145.9 (17 CFR 145.9).
The Commission reserves the right, but shall have no obligation, to
review, pre-screen, filter, redact, refuse, or remove any or all of
your submission from www.cftc.gov that it may deem to be inappropriate
for publication, such as obscene language. All submissions that have
been redacted or removed that contain comments on the merits of the
rulemaking will be retained in the public comment file and will be
considered as required under the Administrative Procedure Act and other
applicable laws, and may be accessible under the Freedom of Information
Act.
FOR FURTHER INFORMATION CONTACT: Vincent McGonagle, Director, 202-418-
5387, vmcgonagle@cftc.gov, Stuart Armstrong, Special Counsel, 202-418-
5095, sarmstrong@cftc.gov, Laurie Gussow, Special Counsel, 202-418-
7623, lgussow@cftc.gov, Sebastian Pujol Schott, Associate Director,
202-418-5641, sps@cftc.gov, Daniel Bucsa, Associate Director, 202-418-
5435, dbucsa@cftc.gov, Division of Market Oversight; Brian O'Keefe,
Deputy Director, 202-418-5658, bokeefe@cftc.gov, Eric Lashner, Special
Counsel, 202-418-5393, elashner@cftc.gov, Division of Clearing and
Risk; Rajal Patel, Special Counsel, 202-418-5261, rpatel@cftc.gov,
Division of Swap Dealer and Intermediary Oversight; Jeffrey Burns,
Assistant General Counsel, 202-418-5051, jburns@cftc.gov, Office of
General Counsel, Commodity Futures Trading Commission, Three Lafayette
Centre, 1155 21st Street NW., Washington, DC 20581.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
II. Request for Comment
III. Issues and Questions
A. Confirmation Data
B. Continuation Data
C. Transaction Types, Entities, and Workflows
D. PET Data and Appendix 1
E. Reporting of Cleared Swaps
F. Other SDR and Counterparty Obligations
G. Swap Dealer/Major Swap Participant Registration and
Compliance
H. Risk
I. Ownership of Swap Data and Transfer of Data Across SDRs
J. Additional Comment
I. Introduction
Title VII of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (the ``Dodd-Frank Act'') \3\ amended the Commodity
Exchange Act (``CEA'' or ``Act'') to establish a comprehensive new
regulatory framework for swaps. Amendments to the CEA included the
addition of provisions requiring the retention and reporting of data
regarding swap transactions, including provisions designed to enhance
transparency, promote standardization, and reduce systemic risk.
Section 727 of the Dodd-Frank Act added to the CEA new section
2(a)(13), which establishes requirements for the real-time reporting
and public availability of swap transaction data, and requires all
swaps, whether cleared or uncleared, to be reported to registered swap
data repositories (``SDRs'').\4\ Sections 723 and 729 of the Dodd-Frank
Act added to the CEA, respectively, sections 2(h)(5) and 4r, which,
among other things, establish reporting requirements for swaps in
effect as of the enactment of the Dodd-Frank Act, as well as swaps
entered into after such enactment but prior to the effective date for
compliance with final swap data
[[Page 16690]]
recordkeeping and reporting rules prescribed by the Commission.
---------------------------------------------------------------------------
\3\ Public Law 111-203, 124 Stat. 1376 (2010).
\4\ See also CEA section 1a(40)(E), 7 U.S.C. 1a(40)(E).
---------------------------------------------------------------------------
Section 728 of the Dodd-Frank Act added to the CEA new section 21,
which established SDRs as a new category of registered entity in order
to facilitate the collection and maintenance of swap data as prescribed
by the Commission, and to facilitate access to such data by
regulators.\5\ In addition, new section 21(b) directs the Commission to
prescribe standards for swap data recordkeeping and reporting.\6\ These
standards are to apply to both registered entities and counterparties
involved with swaps.\7\ CEA section 21(b) further directs the
Commission to prescribe data standards for SDRs \8\ and mandates that
such standards be comparable to those for derivatives clearing
organizations.\9\ CEA section 21(c)(3) provides that, once the data
elements prescribed by the Commission are reported to an SDR, the SDR
shall ``maintain the data [prescribed by the Commission for each swap]
in such form, in such manner, and for such period as may be required by
the Commission.''
---------------------------------------------------------------------------
\5\ Regulations governing core principles and registration
requirements for, and the duties of, SDRs are set forth in part 49
the Commission's regulations. See Swap Data Repositories:
Registration Standards, Duties and Core Principles, 76 FR 54538
(Sept. 1, 2011).
\6\ CEA section 21(b)(1)(A), 7 U.S.C. 24a(b)(1)(A), provides
that ``the Commission shall prescribe standards that specify the
data elements for each swap that shall be collected and maintained
by each registered swap data repository.''
\7\ CEA section 21(b)(1)(B), 7 U.S.C. 24a(b)(1)(B), provides
that ``in carrying out [the duty to prescribe data element
standards], the Commission shall prescribe consistent data element
standards applicable to registered entities and reporting
counterparties.''
\8\ CEA section 21(b)(2), 7 U.S.C. 24a(b)(2), provides that
``the Commission shall prescribe data collection and data
maintenance standards for swap data repositories.''
\9\ CEA section 21(b)(3), 7 U.S.C. 24a(b)(3), provides that
``the [data] standards prescribed by the Commission under this
subsection shall be comparable to the data standards imposed by the
Commission on derivatives clearing organizations in connection with
their clearing of swaps.''
---------------------------------------------------------------------------
After extensive consultation, opportunities for public comment, and
coordination with foreign and domestic regulators, the Commission added
a new part 43 to its regulations,\10\ which sets forth rules for the
free, real-time public reporting of swap transaction data; new part
45,\11\ which establishes swap data recordkeeping rules, as well as
rules for the reporting of swap transaction data to a registered SDR;
new part 46,\12\ which sets forth swap data recordkeeping and reporting
rules for pre-enactment swaps \13\ and transition swaps \14\
(collectively, ``historical swaps''); \15\ and new part 49, which
governs SDR operations and Commission access to SDR data (``SDR
Rules'').\16\ Collectively, these provisions provide the public and
market participants with an unprecedented level of transparency into
swaps markets, create rigorous recordkeeping and data reporting regimes
with respect to swaps, and enable Commission oversight of swap markets
and market participants.
---------------------------------------------------------------------------
\10\ Real-Time Public Reporting of Swap Transaction Data, 77 FR
1182 (Jan. 9, 2012).
\11\ Swap Data Recordkeeping and Reporting Requirements, 77 FR
2136 (Jan. 13, 2012).
\12\ Swap Data Recordkeeping and Reporting Requirements: Pre-
Enactment and Transition Swaps, 77 FR 35200 (June 12, 2012)
(``Historical Swap Reporting Rule'').
\13\ A ``pre-enactment swap'' is a swap entered into prior to
the enactment of the Dodd-Frank Act (July 21, 2010), the terms of
which have not expired as of the date of enactment of the Dodd-Frank
Act. See Historical Swap Reporting Rule at 35226.
\14\ A ``transition swap'' is a swap entered into on or after
the enactment of the Dodd-Frank Act (July 21, 2010), and prior to
the applicable compliance date for reporting historical swaps data
pursuant to part 46 of the Commission's regulations. See Historical
Swap Reporting Rule at 35227.
\15\ See also part 44 of the Commission's regulations (Interim
Final Rule for Reporting Pre-Enactment Swap Transactions, 75 FR
63080 (Oct. 14, 2010); and Reporting Certain Post-Enactment Swap
Transactions, 75 FR 78892 (Dec. 17, 2010)), which established
certain record retention requirements for historical swaps, pending
the adoption of the Commission's final rules, set forth at part 46,
regarding recordkeeping and reporting with respect to historical
swaps.
\16\ See SDR Rules, supra note 5.
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Swap counterparties, including those that are required to be
registered with the Commission as swap dealers (``SD'') or as major
swap participants (``MSP''), have swap data reporting obligations under
part 43, part 45 and part 46 (collectively, the ``swap data reporting
rules''). The swap data reporting rules also place reporting
obligations on derivatives clearing organizations (``DCOs'') that clear
swaps; designated contract markets (``DCMs'') that list swaps for
trading; and swap execution facilities (``SEFs''). At present there are
over 150 potential swap data reporting entities registered \17\ with
the Commission, each of which will have its own business and data
standards for listing, executing or clearing swaps in one or more of
the five asset classes recognized for the purposes of the swap data
reporting rules--interest rates, credit, equity, foreign exchange, and
other commodity. In addition, swaps data may currently be reported to
any registered SDR, each of which will also have its own data
standards.
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\17\ For purposes of this request for comment, the Commission
uses the term ``reporting entity'' to refer to any person,
registrant or non-registrant that has an obligation to report data
pursuant to part 45 of the Commission's regulations, including SDs,
MSPs, unregistered swap counterparties, SEFs, DCMs, and DCOs. The
Commission is also interested in receiving responses from persons
that are complying with part 45 reporting requirements pursuant to
the terms and conditions set forth in staff no-action relief such as
clearinghouses with no-action relief (``no-action CCPs'') or
qualified multilateral trading facilities (``QMTFs'') and foreign
boards of trade (``FBOTs'') complying with FBOT registration
regulations. See CFTC Division of Clearing and Risk, Letter to Eurex
Clearing AG, No-Action Letter No. 14-27 (Mar. 10, 2014); CFTC
Division of Market Oversight and Division of Swap Dealer and
Intermediary Oversight, Conditional No-Action Relief with respect to
Swaps Trading on Certain Multilateral Trading Facilities Overseen by
Competent Authorities Designated by European Union Member States,
No-Action Letter No. 14-16 (Feb. 12, 2014); CFTC Division of
Clearing and Risk, Letter to ASX Clear (Futures) Pty Limited, No-
Action Letter No. 14-07 (Feb. 6, 2014); CFTC Division of Clearing
and Risk, Letter to Japan Securities Clearing Corporation, No-Action
Letter No. 13-73 (Dec. 19, 2013); CFTC Division of Clearing and
Risk, Letter to LCH.Clearnet SA, No-Action Letter No. 13-43 (July
11, 2013), CFTC Division of Clearing and Risk, Letter to Singapore
Exchange Derivatives Clearing Limited, No-Action Letter No. 12-63
(Dec. 21, 2012); CFTC Division of Clearing and Risk, Letter to Japan
Securities Clearing Corporation, No-Action Letter No.12-56 (Dec. 17,
2012). Staff no-action letters (``NALs'') are available at https://www.cftc.gov/LawRegulation/DoddFrankAct/CurrentlyEffectiveStaffLetters/index.htm.
The list of registered entities with reporting obligations
includes reporting entities fully registered with the Commission and
entities that have received provisional registration and/or
temporary registration. Specifically, as of March 1, 2014, it
includes 98 SDs; 23 SEFs; 18 DCMs; 15 DCOs; and two MSPs. Not all
entities that are potential swap reporting entities currently
execute or clear swaps. For example, 9 of the 15 registered DCOs
currently clear swaps.
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The Commission remains committed to the regulatory objectives set
forth and established in these rules. However, to ensure that the swap
data reporting and SDR rules are effective, efficient, and provide the
necessary regulatory information, the Commission requests public
comment on the questions below, which focus on the swap data
recordkeeping and reporting requirements of part 45 and related
regulatory provisions.
II. Request for Comment
The Commission is soliciting comment from all interested parties
regarding part 45 and related provisions of the swap data reporting and
SDR rules. Questions are generally grouped according to the applicable
regulatory provision. Each series of questions includes a brief
explanatory paragraph intended to provide context for the questions
presented. Relevant topics include, among other things, the reporting
of primary economic terms (``PET''), confirmation, and continuation
data; the manner in which the reporting rules address diversity of
transaction types, business models, and data flows present in the swaps
market; the reporting of cleared swaps; and data ownership issues and
data harmonization.
[[Page 16691]]
Commenters' responses should identify the specific question or sub-
question that they are addressing in each response. Responses should
consider the oversight functions performed by the Commission,
including, but not limited to, financial surveillance; market
surveillance; risk monitoring; and trade practice surveillance.
III. Issues and Questions
A. Confirmation Data (Sec. 45.3): What terms of a confirmation of a
swap transaction should be reported to an SDR as ``confirmation data''?
Part 45 requires the reporting of required swap creation data,\18\
which includes PET data \19\ and ``confirmation data,'' defined as
``all of the terms of a swap matched and agreed upon by the
counterparties in confirming the swap.'' \20\ The Commission requests
comment on the following questions regarding confirmation data that
memorializes the agreement of the party to all terms of a swap.
---------------------------------------------------------------------------
\18\ 17 CFR 45.1 (defining required swap creation data as ``all
primary economic terms data for a swap in the swap asset class in
question, and all confirmation data for the swap'').
\19\ 17 CFR 45.1 (defining primary economic terms as ``all of
the data elements necessary to fully report all of the primary
economic terms of a swap in the swap asset class of the swap in
question'').
\20\ 17 CFR 45.1 (defining ``confirmation data'').
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1. What information should be reported to an SDR as confirmation
data? Please include specific data elements and any necessary
definitions of such elements.
a. For confirmations that incorporate terms by reference (e.g.,
ISDA Master Agreement; terms of an Emerging Markets Trade Association
(``EMTA'')), which of these terms should be reported to an SDR as
confirmation data?
2. Should the confirmation data reported to an SDR regarding
cleared swaps be different from the confirmation data reported to an
SDR regarding uncleared swaps? If so, how?
3. Should the confirmation data reported to an SDR regarding swaps
that are subject to the trade execution requirement in CEA section
2(h)(8) be different from the confirmation data reported to an SDR
regarding: (a) Swaps that are required to be cleared but not subject to
the trade execution requirement; (b) swaps that are not subject to the
clearing requirement but that are intended to be cleared at the time of
execution; (c) swaps that are voluntarily submitted to clearing at some
point after execution (e.g., backloaded trades); and (d) uncleared
swaps? If so, how?
4. More generally, please describe any operational, technological,
or other challenges faced in reporting confirmation data to an SDR.
B. Continuation Data (Sec. 45.4): How can the Commission ensure that
timely, complete and accurate continuation data is reported to SDRs,
and that such data tracks all relevant events in the life of a swap?
Part 45 of the Commission's regulations defines ``required swap
continuation data'' as ``all of the data elements that must be reported
during the existence of a swap to ensure that all data concerning the
swap in the SDR remains current and accurate, and includes all changes
to PET data occurring during the existence of the swap.'' \21\ A swap's
continuation data includes all lifecycle event data if the swap is
reported using the lifecycle reporting method,\22\ or all state data
\23\ if the swap is reported using the snapshot reporting method.\24\
In addition, continuation data also includes all valuation data for the
swap.\25\
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\21\ Id.
\22\ See generally, 17 CFR 45.4.
\23\ See 17 CFR 45.1 (defining ``state data'').
\24\ See generally, 17 CFR 45.4.
\25\ Id.
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Since implementation of part 45, market participants have raised a
number of questions with respect to how certain events in the life of a
swap should be represented when reporting continuation data. Divergent
methods of reporting continuation data may introduce challenges to
tracking the life of a swap. In addition, some non-SD/MSP
counterparties have indicated that they have sometimes encountered
difficulties in reporting continuation data to SDRs and in accessing
data reported on their behalf by SDs and MSPs. Accordingly, the
Commission requests comment on the following questions regarding
continuation data.
5. What processes and tools should reporting entities implement to
ensure that required swap continuation data remains current and
accurate?
6. Swaps should be linked when new swaps result from the
assignment, netting, compression, clearing, novation, allocation, or
option exercise of existing swaps (or other events wherein new swaps
result from existing swaps).
a. What is the most effective and efficient method for achieving
this link (including information regarding the time of the relevant
event)?
b. How should reporting entities identify the reason why two swaps
are linked (e.g., identify that swap A is linked to swaps B and C in an
SDR or across multiple SDRs because swaps B and C arose from the
clearing and novation of swap A)?
c. Aside from those events set forth in part 45, are there other
events that require linkage between related swap transactions?
d. How should related swaps reported to different SDRs be linked?
i. Snapshot/State/Lifecycle Methods (Sec. 45.4)
7. What are the benefits and/or disadvantages of reporting
continuation data using: (i) The lifecycle reporting method; and (ii)
the snapshot reporting method?
a. Are there events or information that can be represented more
effectively using one of the reporting methods rather than the other?
b. Should all SDRs be required to accept both the snapshot and
lifecycle methods for reporting continuation data?
ii. Valuation Data Reporting (Sec. Sec. 45.4(b), 45.4(c), and NALs 13-
34 and 12-55) \26\
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\26\ See CFTC Division of Market Oversight, Extension of Time-
Limited No-Action Relief for Swap Dealers and Major Swap
Participants from Compliance with Reporting Obligations Under 17 CFR
45.4(b)(2)(ii), No-Action Letter No. 13-34 (June 26, 2013); CFTC
Division of Market Oversight, Time-Limited No-Action Relief for Swap
Dealers and Major Swap Participants From Compliance With Reporting
Obligations Under 17 CFR 45.4(b)(2)(ii), No-Action Letter No. 12-55
(Dec. 10, 2013).
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8. How can valuation data most effectively be reported to SDRs to
facilitate Commission oversight? How can valuation data most
effectively be reported to SDRs (including specific data elements), and
how can it be made available to the Commission by SDRs?
a. Should SDs and MSPs continue to be required by the swap data
reporting rules to provide their own valuation data for cleared swaps
to SDRs? If so, what are the benefits and challenges associated with
this valuation reporting?
b. What challenges and benefits are associated with unregistered
swap counterparties (both financial entities \27\ and non-financial
entities) reporting valuation data for uncleared swaps to SDRs on a
quarterly basis?
---------------------------------------------------------------------------
\27\ CEA section 2(h)(7)(C), 7 U.S.C. 2(h)(7)(C); see also 17
CFR 1.3(mmm).
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iii. Events in the Life of a Swap (Sec. 45.4)
9. Please: (i) Identify and (ii) describe the complete range of
events that can occur in the life of a swap. Please also address
whether, and if so how, reporting entities should report each such
event.
a. How should events in the life of a swap be represented in SDR
data? For
[[Page 16692]]
example, should an ``event type'' identifier, as well as a description
of the specific event, be required?
10. Can swap data reporting be enhanced so that the current state
of a swap in an SDR (e.g., open, cancelled, terminated, or reached
maturity) can be determined more efficiently and, if so, how?
a. What role should SDRs play in auditing swaps data to help
identify the current state of a swap?
b. Should reporting entities and/or SDRs be required to take any
actions upon the termination or maturity of a swap so that the swap's
status is readily ascertainable and, if so what should those
requirements be?
c. Should swaps that are executed on or pursuant to the rules of a
DCM or SEF, but which are not accepted for clearing and are therefore
void ab initio, continue to be reported to and identified in SDR data?
Why or why not? If so, how? \28\
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\28\ See Staff Guidance on Swaps Straight-Through Processing
(Sept. 26, 2013), available at https://www.cftc.gov/ucm/groups/public/@newsroom/documents/file/stpguidance.pdf; CFTC Division of
Clearing and Risk and Division of Market Oversight, Time-Limited No-
Action Relief for Swap Execution Facilities from Compliance with
Certain Requirements of Commission Regulation 37.9(a)(2) and
37.203(a), No-Action Letter No. 13-66 (Oct. 25, 2013).
---------------------------------------------------------------------------
i. Should the swap data reporting rules be enhanced or further
clarified to address void ab initio swaps?
11. Should the Commission require periodic reconciliation between
the data sets held by SDRs and those held by reporting entities?
iv. Change in Status of Reporting Counterparty (Sec. 45.8)
12. Commission regulation 45.8 establishes a process for
determining which counterparty to a swap shall be the reporting
counterparty. Taking into account statutory requirements, including the
reporting hierarchy in CEA section 4r(a)(3),\29\ what challenges arise
upon the occurrence of a change in a reporting counterparty's status,
such as a change in the counterparty's registration status? In such
circumstances, what regulatory approach best promotes uninterrupted and
accurate reporting to an SDR?
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\29\ See 7 U.S.C. 6r(a)(3) (providing that, with respect to a
swap in which only one counterparty is an SD or MSP, the SD or MSP
shall report the swap; with respect to a swap in which one
counterparty is an SD and the other an MSP, the SD shall report the
swap; and with respect to any other swap, the counterparties to the
swap shall select a counterparty to report the swap).
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C. Transaction Types, Entities, and Workflows: Can the Swap Data
Reporting Rules be Clarified or Enhanced to Better Accommodate Certain
Transactions and Workflows Present in the Swaps Market?
Market participants have requested clarification from Commission
staff regarding the appropriate manner to report certain swap
transactions and workflows that are not explicitly addressed in the
swap data reporting rules. Accordingly, the Commission requests comment
related to the specific questions below.
13. Please describe all data transmission processes arising from
the execution, confirmation, clearing, and termination of a swap, both
cleared and uncleared. Please include in your response any processes
arising from all relevant platforms and methods of execution.
14. Please identify any Commission rules outside of part 45 that
impact swap data reporting pursuant to part 45. How do such other rules
impact part 45 reporting?
15. What are the challenges presented to reporting entities and
other submitters of data when transmitting large data submissions to an
SDR? Please include the submission methods utilized and the
technological and timing challenges presented.
i. Bespoke Transactions (Sec. 45.3, Appendix 1 to Part 45, and NALs
13-35, and 12-39) \30\
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\30\ See CFTC Division of Market Oversight, Additional Time-
Limited No-Action Relief for Bespoke or Complex Swaps from Certain
Swap Data Reporting Requirements of Parts 43 and 45 of the
Commission's Regulations, No-Action Letter No. 13-35 (June 27, 2013)
(``NAL 13-35''); CFTC Division of Market Oversight, Time-Limited No-
Action Relief for Bespoke or Complex Swaps from Certain Swap Data
Reporting Requirements of Parts 43 and 45 of the Commission's
Regulations, No-Action Letter No.12-39 (Nov. 30, 2012) (``NAL 12-
39'').
---------------------------------------------------------------------------
16. Market participants have indicated that they face challenges
electronically representing all required data elements for swap
transactions because those elements have not yet been incorporated into
standard industry representations (e.g., FpML, FIXML). In particular,
various market participants have indicated that these challenges impact
reporting to SDRs. What is the most efficient methodology or process to
standardize the data elements of a bespoke, exotic or complex swap, to
ensure that all required creation data is electronically represented
when reported to the SDR? Do these challenges vary depending on the
asset class? If so, how?
ii. Allocations and Compressions (Sec. Sec. 45.3, 45.4, NALs 13-01 and
12-50) \31\
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\31\ See CFTC Division of Clearing and Risk, No-Action Relief
from Required Clearing for Swaps Resulting from Multilateral
Portfolio Compression Exercises, No-Action Letter No. 13-01 (Mar.
18. 2013); CFTC Division of Market Oversight, Time-Limited No-Action
Relief for Agents from the Post-Allocation Swap Timing Requirement
of Sec. 45.3(e)(ii)(A) of the Commission's Regulations, No-Action
Letter No. 12-50 (Dec. 13, 2012).
---------------------------------------------------------------------------
17. Please describe any challenges associated with the reporting of
allocations. How should allocation data elements (i.e., indications of
whether swaps will be allocated, as well as the identities of entities
to which portions of executed swaps are allocated) be reported to SDRs?
18. How should swaps resulting from compression exercises and risk
mitigation services be reported to, and identified in, an SDR so that
the Commission is able to effectively review these exercises and
determine what swaps result from a specific exercise?
a. Please describe any technological, operational, or logistical
challenges associated with reporting of such swap transactions.
iii. Prime Brokerage (NAL 12-53) \32\
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\32\ See CFTC Division of Market Oversight, Time-Limited No-
Action Relief from (i) Parts 43 and 45 Reporting for Prime Brokerage
Transactions, and (ii) Reporting of Unique Swap Identifiers in
Related Trades under Part 45 by Prime Brokers, No-Action Letter No.
12-53 (Dec. 17, 2012).
---------------------------------------------------------------------------
19. Please describe any challenges associated with the reporting of
prime brokerage swap transactions (e.g., challenges related to
transactions executed either bilaterally or on a platform and/or
involving different asset classes)?
iv. Commodity Trade Options (NAL 13-08) \33\
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\33\ See CFTC Division of Market Oversight, Staff No-Action
Relief from the Reporting Requirements of Sec. 32.3(b)(1) of the
Commission's Regulations, and Certain Recordkeeping Requirements of
Sec. 32.3(b), for End Users Eligible for the Trade Option
Exemption, No-Action Letter No. 13-08 (Apr. 5, 2013).
---------------------------------------------------------------------------
20. Under Commission regulation 32.3(b)(1), swap counterparties
generally are required to report trade options pursuant to the
reporting requirements of part 45 if, during the previous twelve
months, they have become obligated to report under part 45 as the
reporting counterparty in connection with any non-trade option swaps.
Under Commission regulation 32.3(b)(2), trade options that are not
otherwise required to be reported to an SDR under part 45 are required
to be reported to the Commission by both counterparties to the
transaction through an annual Form TO filing.
[[Page 16693]]
Please describe any challenges associated with the reporting of
commodity trade options, whether reported to an SDR or to the
Commission on Form TO.
v. Swaps Executed or Cleared on or by FBOTs, No-Action CCPs, QMTFs, and
Other Non-Registrants/Exempt Entities (Sec. Sec. 45.3, 45.4, 45.5, and
NALs 14-27, 14-16, 14-07, 13-73, 13-43, 13-33, 12-63, and 12-56) \34\
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\34\ See note 17, supra.
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21. Are there instances in which requirements of CFTC regulations
or reliance on exemptive or staff no-action relief \35\ result in more
than one party reporting data to an SDR regarding a particular swap? If
so, how should such duplicative reporting be addressed? What should be
the role of the reporting entities, as well as other submitters of
data, and SDRs in identifying and deleting duplicative reports? What
solutions should be implemented to prevent such duplicative reporting?
---------------------------------------------------------------------------
\35\ Staff no-action letters are available at https://www.cftc.gov/LawRegulation/DoddFrankAct/CurrentlyEffectiveStaffLetters/index.htm.
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22. In addition to those entities enumerated in Commission
regulation 45.5, should other entities involved in swap transactions
also be permitted to create unique swap identifiers (``USIs'')? If so,
please describe those situations and the particular rationale for any
such expansion of the USI-creation authority.
23. How should data reported to SDRs identify trading venues such
as SEFs, DCMs, QMTFs, FBOTs, and any other venue?
vi. Inter-Affiliate Swaps (Sec. Sec. 45.3, 45.4, 45.6, and NAL 13-09)
\36\
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\36\ See CFTC Division of Market Oversight and Division of
Clearing and Risk, No-Action Relief for Swaps Between Affiliated
Counterparties That Are Neither Swap Dealers Nor Major Swap
Participants from Certain Swap Data Reporting Requirements Under
Parts 45, 46, and Regulation 50.50(b) of the Commission's
Regulations, No-Action Letter No. 13-09 (Apr. 5, 2013).
---------------------------------------------------------------------------
24. In order to understand affiliate relationships and the combined
positions of an affiliated group of companies, should reporting
counterparties report and identify (and SDRs maintain) information
regarding inter-affiliate relationships? Should that reporting be
separate from, or in addition to, Level 2 reference data set forth in
Commission regulation 45.6? \37\ If so, how?
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\37\ Commission regulation 45.6 provides that level two
reference data for each swap counterparty, consisting of the
identity of the counterparty's ultimate parent, shall be reported
into a level two reference database. The Commission shall determine
the location of the level two reference database by means of a
Commission order that is published in the Federal Register and on
the Commission's Web site. The order shall include notice of the
location of the level two reference database and information
concerning the procedure and requirements for reporting level two
reference data to the database. The obligation to report level two
reference data does not apply until the Commission has determined
the location of the level two reference database. As of March 1,
2014, the obligation to report level two reference data pursuant to
Commission regulation 45.6 does not apply.
---------------------------------------------------------------------------
vii. Reliance on No-Action Relief in General
25. To the extent that a reporting entity is, in reliance on
effective no-action relief issued by Commission staff, reporting to an
SDR in a time and/or manner that does not fully comply with the swap
data reporting rules (e.g., outside reporting rules' timeframe,
required data elements missing), how can the reporting entity most
effectively indicate its reliance upon such no-action relief for each
affected data element?
a. Are there any other challenges associated with the reliance on
staff no-action relief with respect to compliance with part 45? If so,
please describe them and explain how the swap data reporting rules
should address those challenges.
viii. Post-Priced Swaps (Sec. Sec. 45.3 and 45.4)
26. Under the swap data reporting rules, are there any challenges
presented by swaps for which the price, size, and/or other
characteristics of the swap are determined by a hedging or agreed upon
market observation period that may occur after the swap counterparties
have agreed to the PET terms for a swap (including the pricing
methodology)? If so, please describe those challenges.
ix. Complex Swap Transactions (NAL 14-12) \38\
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\38\ See CFTC Division of Market Oversight, No-Action Relief
from the Commodity Exchange Act Sections 2(h)(8) and 5(d)(9) and
from Commission Regulation Sec. 37.9 for Swaps Executed as Part of
a Package Transaction, No-Action Letter No. 14-12 (Feb. 10, 2014).
---------------------------------------------------------------------------
27. Please describe how swap transactions such as strategies and
packages should be represented in swap data reporting such that it
enables the Commission to effectively understand timing and the
economics of the strategy or package and the component swap
transactions?
D. PET Data and Appendix 1 (Sec. 45.3 and Appendix 1): Monitoring the
Primary Economic Terms of a Swap
Appendix 1 to part 45 sets forth a list of minimum PET terms for
swap transactions within each of the five asset classes. Market
participants have indicated that there are circumstances in which they
face challenges in either the initial reporting of certain PET terms or
the subsequent reporting of modifications to these terms. Market
participants have also indicated that the data elements included in
Appendix 1 may not sufficiently reflect all necessary economic terms
for various swap transactions.
28. Please describe any challenges (including technological,
logistical or operational) associated with the reporting of required
data fields, including, but not limited to:
a. Cleared status;
b. Collateralization;
c. Execution timestamp;
d. Notional value;
e. U.S. person status; and
f. Registration status or categorization under the CEA (e.g., SD,
MSP, financial entity).
29. What additional data elements beyond the enumerated fields in
Appendix 1 of part 45, if any, are needed to ensure full, complete, and
accurate representation of swaps (both cleared and uncleared)? For
example, other fields could include additional timestamps (for each
lifecycle event, including clearing-related timestamps); clearing-
related information (identity of futures commission merchant, clearing
member, house vs. customer origin indication, mandatory clearing
indicator, or indication of exception or exemption from clearing); and/
or execution-specific terms (order type or executing broker). Responses
should consider the full range of oversight functions performed by the
Commission, including, but not limited to, financial surveillance;
market surveillance; risk monitoring; and trade practice surveillance.
a. Should the Commission require reporting of the identities,
registration status, and roles of all parties involved in a swap
transaction (e.g., special entity (as defined in Commission regulation
23.401(c)); executing broker; or voice/electronic systems)?
b. What, if any, additional fields would assist the Commission in
obtaining a more complete picture of swaps executed on SEFs or DCMs
(e.g., order entry time; request for quote (``RFQ''), or central limit
order book (``CLOB''), or order book; request for cross, blocks, and
other execution method indicators or broker identification)?
c. Are there additional data elements that could help the
Commission fulfill its oversight obligations, as described above?
d. Should the fact that a swap is guaranteed be a required data
element for SDR reporting? If so, what
[[Page 16694]]
information regarding the guarantee should be reported to the SDR? What
will be the challenges presented to the reporting party in capturing
this information?
30. Have reporting entities been unable to report to an SDR terms
or products that they believe are required under part 45 or related
provisions? If so, please generally describe the data elements and/or
products involved.
a. Where a single swap has more than two counterparties, please
comment on how such information should be provided within a single part
45 submission (i.e., one USI)?
31. Could the part 45 reporting requirements be modified to render
a fuller and more complete schedule of the underlying exchange of
payment flows reflected in a swap as agreed upon at the time of
execution? If so, how could the requirements be modified to capture
such a schedule?
32. Taking into account the European Union's reporting rules \39\
and Commission regulation 39.19, should the Commission require
additional reporting of collateral information? If so, how should
collateral be represented and reported? Should there be any differences
between how collateral is reported for cleared and uncleared swaps?
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\39\ See European Securities Markets Authority's European Market
Infrastructure Regulation (``EMIR'') and corresponding rules,
available at https://www.esma.europa.eu/page/European-Market-Infrastructure-Regulation-EMIR.
---------------------------------------------------------------------------
E. Reporting of Cleared Swaps (Sec. Sec. 45.3, 45.4, 45.5, and 45.8):
How Should the Swap Data Reporting Rules Address Cleared Swaps?
The Commission has a strong regulatory interest in monitoring
transactions and risk in both the cleared and uncleared swap markets.
Information regarding cleared swaps (both voluntarily cleared and
required to be cleared) comes directly to the Commission daily in the
form of position information under Commission regulation 39.19. In
addition, pursuant to the swap data reporting rules, cleared swap
information is reported on a transaction basis to SDRs. The Commission
monitors the cleared swap market on a transaction and position basis to
ensure compliance with the Act and Commission rules, including those
associated with trade execution and clearing and the clearing
requirement in section 2(h)(1) of the Act.
Cleared swaps currently are reported as three separate swaps.\40\
Industry convention refers to the original swap as the ``alpha'' swap
and the two equal and opposite resulting swaps as the ``beta'' and
``gamma'' swaps. The Commission has previously determined that the
alpha, beta, and gamma swaps, although related, are reported as
separate swaps for purposes of part 45.\41\ Information regarding the
alpha, beta, and gamma swaps in an SDR must at all times be current and
accurate and include all changes to each swap throughout its
lifecycle.\42\
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\40\ Commission regulation 39.12(b)(6) requires a DCO to have a
rule providing that once a swap is accepted for clearing by a DCO
such swap is extinguished and is replaced by two equal and opposite
swaps. 17 CFR 39.12(b)(6).
\41\ See 77 FR 2136; Statement of the Commission on the Approval
of CME Rule 1001 at 6 (``A cleared swap in fact comprises three
separate swaps.''), available at https://www.cftc.gov/ucm/groups/public/@newsroom/documents/file/statementofthecommission.pdf.
\42\ See 17 CFR 45.4(a) (``[R]eporting counterparties and
derivatives clearing organizations required to report swap
continuation data must do so in a manner sufficient to ensure that
all data in the swap data repository concerning the swap remains
current and accurate, and includes all changes to the primary
economic terms of the swap occurring during the existence of the
swap.''); see 77 FR at 2153 (``[T]he final rule requires registered
entities and reporting counterparties to report continuation data in
a manner sufficient to ensure that the information in the SDR
concerning the swap is current and accurate, and includes all
changes to any of the primary economic terms of the swap.''); see
also 17 CFR 49.11 (confirmation of data accuracy).
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The Commission requests comment on the existing cleared swaps
reporting framework. The Commission is particularly interested in the
extent to which the reporting of cleared swaps can be improved to: (i)
Ensure consistency across the Commission's regulations; and (ii)
achieve efficiencies in both the Commission's review of cleared swaps
data and the DCOs' reporting of information to the Commission and SDRs.
In this regard, the Commission seeks comment on what additional data
elements, if any, should be reported to an SDR with respect to cleared
swaps that would provide the Commission with information necessary to
monitor and track swaps created through clearing and resulting
positions facing the DCO.
The Commission also requests comment related to the specific
questions below.
33. Part 45 requires the reporting of all swaps to SDRs. The
Commission requests comment on how cleared swaps should be reported.
Specifically:
a. For swaps that are subject to the trade execution requirement in
CEA section 2(h)(8), and ipso facto the clearing requirement, do
commenters believe that the part 45 reporting requirements with respect
to original swaps (alpha) should be modified or waived, given that the
two new resulting swaps (beta and gamma) will also be reported?
b. For swaps that are subject to the clearing requirement, but not
the trade execution requirement, do commenters believe that the part 45
reporting requirements with respect to alpha swaps should be modified
or waived, given that the beta and gamma swaps will also be reported?
c. For swaps that are not subject to the clearing requirement, but
are intended for clearing at the time of execution, do commenters
believe that the part 45 reporting requirements with respect to alpha
swaps should be modified or waived, given that the beta and gamma swaps
will also be reported?
d. Please discuss whether in each of the circumstances described
above there actually is an alpha swap.
34. In addressing the questions posed in items 33 (a)-(d),
commenters are also requested to address how any modifications to the
reporting of cleared swaps would be consistent with the swap reporting
requirement in CEA section 2(a)(13)(G) and the restrictions on CFTC
exemptive authority in CEA section 4(c)(1)(A)(i)(I).
35. Can the existing rules be improved to more clearly represent
how the clearing process impacts reporting obligations with respect to
both the original swap (alpha) and the two new resulting swaps (beta
and gamma)? If so, please explain.
a. Responses should address:
i. The reporting obligations applicable to alpha swaps;
ii. The reporting obligations applicable to beta and gamma swaps;
iii. Who holds the reporting obligation(s) for each swap;
iv. The reporting of the linkage of alpha, beta, and gamma swaps;
and
v. Who has the legal right to determine the SDR to which data is
reported?
36. What steps should reporting entities and/or SDRs undertake to
verify the absence of duplicate records across multiple SDRs for a
single cleared swap transaction?
37. How should cleared swap data be represented in the SDR to
facilitate the Commission's oversight of compliance with clearing-
related rules, including the clearing requirement (Commission
regulations 50.2 and 50.4) and straight-through processing requirements
(Commission regulations 1.74, 23.506, 37.702(b), 38.601, and
39.12(b)(7))?
38. What reporting technique, term, or flag is recommended to
identify a cleared swap?
[[Page 16695]]
i. CDS-Clearing Related Swaps and Open Offer (Part 45 and NALs 12-59,
13-36, and 13-86) \43\
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\43\ See CFTC Division of Market Oversight, Time-Limited No-
Action Relief for Swap Dealers and Major Swap Participants from the
Reporting Provisions of Part 45 for CDS Clearing-Related Swaps, No-
Action Letter No. 12-59 (Dec. 19, 2012); CFTC Division of Market
Oversight, Extension of Time-Limited No-Action Relief for Swap
Dealers and Major Swap Participants from the Reporting Requirements
of Part 45 for CDS Clearing-Related Swaps, No-Action Letter No. 13-
36 (June 27, 2013); CFTC Division of Market Oversight, Provision of
Time-Limited No-Action Relief to DCOs and their Clearing Members
from the SEF Registration Requirement and Trading Mandate under Part
37 and from Various Reporting Requirements under Part 45, all in
Connection with CDS Clearing-Related Swaps, No-Action Letter No. 13-
86 (Dec. 31, 2013).
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39. Swaps created by operation of a DCO's rules related to
determining the end-of-day settlement prices for cleared credit default
swaps (``CDS'') are also known as ``firm trades'' or ``clearing-related
swaps'' (see NAL 13-86). How should these swaps be reported pursuant to
the swap data reporting rules?
40. Aside from ``firm trades,'' some swaps may be created from
``open offer,'' meaning there is no original swap between two
counterparties, but only equal and opposite swaps between each of the
counterparties and the clearinghouse. How should the swap data
reporting rules address such swaps?
ii. DCO Reporting, Netting Processes, and Positions (Sec. Sec. 45.3
and 45.4)
41. As described above, DCOs provide position data to the
Commission pursuant to part 39 and report transactions to SDRs pursuant
to part 45. The Commission is aware of potential overlap in these data
sets. With respect to such overlap, how can reporting of swaps data be
made more efficient, while ensuring that the Commission continues to
receive all data necessary to fulfill its regulatory responsibilities?
42. For cleared swaps, how can the netting and compression of swaps
and positions by DCOs be most effectively represented?
a. Please provide recommendations regarding the reporting of
netting and compression, and describe any relevant differences in
reporting of netting and of compression.
b. Are netting and compression different concepts in the uncleared
swaps markets versus the cleared swap market? If so, how?
F. Other SDR and Counterparty Obligations (Sec. Sec. 45.9, 45.13,
45.14): How Should SDRs and Reporting Entities Ensure That Complete and
Accurate Information is Reported to, and Maintained by, SDRs?
When using swaps data reported to SDRs, the Commission must rely on
the accuracy and completeness of such data throughout the life of a
swap. Data accuracy can be achieved through, among other means, SDR
processes confirming the accuracy of data submitted, data
reconciliation exercises by reporting entities, and by the prompt
reporting of errors and omissions by reporting entities.
Commission regulation 45.14 requires registered entities and swap
counterparties to report any errors or omissions in data they
previously reported. Additionally, each non-reporting counterparty to a
swap that discovers an error or omission with respect to swap data
reported to an SDR must promptly notify the reporting counterparty of
the error or omission. Commission regulation 49.11 requires SDRs to
adopt policies and procedures to ensure the accuracy of swap data and
to confirm the accuracy of all swap data reported pursuant to part 45.
Commission regulation 49.11(b) provides--in pertinent part--that a
registered SDR ``has confirmed the accuracy of swap data submitted
directly by a counterparty if the [SDR] has notified both
counterparties of the data that was submitted and received from both
counterparties acknowledgement of the accuracy of the swap data and
corrections for any errors.''
43. The Commission requests comment that addresses whether
reporting entities face challenges with respect to complete and
accurate swap data reporting.
44. The Commission also requests comment regarding whether
clarifications or enhancements to swap data reporting requirements,
including requirements relating to the reporting of errors and
omissions and requirements for data reconciliation across reporting
entities, could facilitate accurate and complete reporting of data to
the SDRs, as well as data maintained in the SDRs.
45. Should third-party service providers that report part 45 data
to SDRs on behalf of reporting entities be required to register with
the Commission?
i. Confirmation of Data Accuracy and Errors and Omissions (Sec. 45.14)
46. Commission regulation 49.11(b) requires SDRs to verify with
both counterparties the accuracy of swaps data reported to an SDR
pursuant to part 45. What specific, affirmative steps should SDRs take
to verify the accuracy of data submitted? Please include in your
response steps that SDRs should take regarding data submitted by
reporting counterparties on behalf of non-reporting counterparties who
are not participants or users of the SDR.
47. In what situations should an SDR reject part 45 data from
entities due to errors or omissions in the data? How should the
Commission balance legal requirements for reporting as soon as
technologically practicable and the need for complete and accurate
data?
48. All data in an SDR must be current and accurate, and the
Commission expects SDRs, counterparties, and registered entities to
take proactive steps to ensure data accuracy. Are there challenges that
a reporting entity faces in confirming data accuracy? If so, how can
those challenges most effectively be addressed?
49. If an error or omission is discovered in the data reported to
an SDR, what remedies and systems should be in place to correct the
data? Within what time frame should a reporting entity be required to
identify an error in previously reported data and submit corrected
information to an SDR?
ii. SDR Required Data Standards (Sec. 45.13)
50. In addition to data harmonization, how can reporting entities
and SDRs improve data quality and standardization across all data
elements and asset classes within an SDR? Please provide examples of
how the presentation of data may be standardized, utilizing specific
data elements.
51. How should SDRs leverage the results of data elements
harmonization to help ensure regulatory reporting is more accurate and
consistent?
52. Are there additional existing swaps data standards (other than
the legal entity identifier (``LEI''), unique product identifier
(``UPI'') and USI) that the Commission should consider requiring as
part of any effort to harmonize SDR data with both domestic and foreign
regulators?
iii. Identifiers (Sec. Sec. 45.5, 45.6 and 45.7)
53. Please explain your experiences and any challenges associated
with obtaining and maintaining an LEI.
a. What additional steps can market participants and SDRs take to
help ensure counterparties have valid LEIs?
54. What principles should the Commission consider when designating
[[Page 16696]]
a UPI and product classification system pursuant to Sec. 45.7?
a. Are there any commonly used taxonomies that the Commission
should consider in connection with the designation process? Please
respond by asset class.
55. Please explain your experiences and any challenges associated
with the creation, transmission and reporting of USIs.
G. Swap Dealer/Major Swap Participant Registration and Compliance: How
Can the Commission Enhance Part 45 to Facilitate Oversight of Swap
Dealers and Major Swap Participants?
One Commission interest in swap data reporting is to evaluate
whether a market participant meets the definition of, and is required
to register as, an SD or MSP.\44\ The Commission can use swap data
reports to determine a market participant's aggregate gross notional
amount of swap transactions on a rolling 12-month basis, taking into
account, among other things, the definitions of SD and MSP and the
Commission's registration requirements.\45\ Additionally, swap data
reporting allows the Commission to assess a market participant's
compliance with the Commission's regulations, including, but not
limited to, part 23 requirements for SDs and MSPs (e.g., swap
confirmation,\46\ portfolio compression,\47\ and swap processing and
clearing requirements \48\).
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\44\ 17 CFR 1.3(ggg); see Further Definition of ``Swap Dealer,''
``Security-Based Swap Dealer,'' ``Major Swap Participant,'' ``Major
Security-Based Swap Participant,'' and ``Eligible Contract
Participant,'' 77 FR 30596 (May 23, 2012).
\45\ 17 CFR 3.10; see Registration of Swap Dealers and Major
Swap Participants, 77 FR 2613 (Jan. 19, 2012).
\46\ 17 CFR 23.501; see Confirmation, Portfolio Reconciliation,
Portfolio Compression, and Swap Trading Relationship Documentation
Requirements for Swap Dealers and Major Swap Participants, 77 FR
55903 at 55917 (Jan. 19, 2012) (``Confirmation has been recognized
as an important post-trade processing mechanism for reducing risk
and improving operational efficiency by both market participants and
their regulators. Prudent practice requires that, after coming to an
agreement on the terms of a transaction, parties document the
transaction in a complete and definitive written record so there is
legal certainty about the terms of their agreement.'').
\47\ 17 CFR 23.503; see 77 FR at 55932 (``Portfolio compression
is an important, post-trade processing and netting mechanism that
can be an effective and efficient tool for the timely and accurate
processing and netting of swaps by market participants.'').
\48\ 17 CFR 23.506; see Customer Clearing Documentation, Timing
of Acceptance for Clearing, and Clearing Member Risk Management, 77
FR 21278 at 21281 (Apr. 9, 2012) (noting that the rule was adopted
``in order to ensure compliance with any mandatory clearing
requirement issued pursuant to section 2(h)(1) of the CEA and to
promote the mitigation of counterparty credit risk through the use
of central clearing'').
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The Commission requests comment on what clarifications or
enhancements, if any, should be made to the swap data reporting rules
so that it may better monitor SDs and MSPs. The Commission also
requests comment related to the specific questions below.
56. Should the Commission require an SDR to aggregate the number of
transactions by an entity, and the aggregate notional value of those
transactions, to reflect the entity's total swap position and its total
swap activity during a given period (e.g., for purposes of monitoring
the SD de minimis calculation)?
57. Should data elements be reported to the SDR to reflect whether
a swap is a dealing or non-dealing swap? If so, how should this
information be reflected in the SDR?
58. Where transactions are executed in non-U.S. dollar (``USD'')
denominations, should the SDR data reflect USD conversion information
for the notional values, as calculated by the counterparty at the time
of the transaction (rather than the conversion taking place at the
SDR)?
a. If so, how should the SDR data reflect this information?
b. Would this answer be different depending on the registration
status of the reporting counterparty (e.g., SD/MSP)?
H. Risk: How Can Part 45 Better Facilitate Risk Monitoring and
Surveillance?
Swap data reported to SDRs facilitates a number of Commission risk
monitoring and surveillance activities, including monitoring of both
financial and market risks resulting from the accumulation of large
positions in cleared and uncleared swaps.
The Commission has supervisory programs for DCOs, futures
commission merchants, SDs, MSPs, and other participants in the clearing
system. These programs monitor market participants' compliance with
applicable provisions of the Act and Commission regulations, including
parts 1, 22, 23, 39, and 50. A primary concern of these programs is to
monitor and mitigate potential risks that can arise from swaps
activities.
With respect to clearing, the Commission conducts periodic
examinations of DCOs, and Commission risk surveillance staff monitors,
on a daily basis, the risks posed to or by DCOs, clearing members, and
market participants. This analysis includes reviewing position data at
the trader, clearing member, and DCO levels.
The Commission requests comment on what clarifications or
enhancements, if any, should be made to the swap data reporting rules
so that it may better monitor risk and conduct related surveillance.
The Commission also requests comment on the specific questions below.
59. Should the Commission require SDRs to calculate market
participants' positions in cleared and uncleared swaps?
a. Given the definition of ``position'' in part 49 of the
Commission's regulations,\49\ and the transactional nature of swap data
reporting, how should an SDR calculate the positions of market
participants whose swaps are reported to it?
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\49\ See 17 CFR 49.2; SDR Rules at 54576.
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i. Please explain whether these calculations should differ by
underlying instrument, index or reference entity, counterparty, asset
class, long risk of underlying instrument, index, or reference entity,
or short risk of the underlying instrument, index or reference entity,
or any other attribute.
b. How should SDR positions or position calculation methods relate,
if at all, to positions calculated by DCOs and DCOs' position
calculation methods?
60. Are there data elements that should be reported on a
transaction basis to identify the linkage between a swap transaction
and a reporting counterparty's other positions in products regulated by
the Commission?
61. How can swap data reporting be enhanced to facilitate the
calculation of positions within SDRs?
a. How should position information within an individual SDR be
aggregated across multiple SDRs so that the Commission has a complete
view of a market participant's risk profile for swaps reportable under
Dodd-Frank?
b. How can the Commission efficiently aggregate information by
product and by market participant in order to understand positions
across cleared and uncleared markets?
62. How can the Commission best aggregate data across multiple
trade repositories (including registered SDRs)?
63. What international regulatory coordination would be necessary
to facilitate such data aggregation?
I. Ownership of Swap Data and Transfer of Data Across SDRs
Since the adoption of the swap data reporting and SDR rules,
questions have emerged whether a particular party or parties have the
legal authority to direct and/or use such swap data.
Commission regulation 49.17(g) generally prohibits a registered SDR
from using the data it maintains for
[[Page 16697]]
commercial or business purposes. As part of this prohibition,
Commission regulation 49.17(g) requires registered SDRs to adopt and
implement adequate ``firewalls'' to protect the swaps data from any
improper commercial use. Commission regulation 49.17(g)(2) provides a
limited exception if the submitters of the data provide express written
consent to the SDR.\50\
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\50\ The statutory basis for the regulation is set forth in
Sections 21(c)(6), 21(c)(7), and 21(f)(3) of the CEA adopted as part
of Section 728 of the Dodd-Frank Act, 7 U.S.C. 24a(c)(6), 24a(c)(7),
and 24a(f)(3).
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Because of the inherent conflicts in connection with maintaining
swap data and SDR operations (e.g., the incentive to develop ancillary
services using swap data), the Commission in part 49 required that
``commercial use'' of any data submitted to and maintained by an SDR be
restricted. Accordingly, Commission regulation 49.27 requires
registered SDRs to provide fair, open and equal access to their
services and provides that registered SDRs must not discriminate
against submitters of data regardless of whether such a submitter has
agreed to any ``commercial use'' of its data.
The basis for prohibiting SDRs from commercializing Core Data \51\
without the consent of the counterparties is based on (i) the duty of
the SDR set forth in Section 21(c)(6) of the CEA to keep swap
information private and confidential, and (ii) the inherent conflict of
interest for an SDR to use Core Data for commercial purposes. Core
Principle 3 set forth in Section 21(f)(3) of the CEA requires SDRs to
``establish and enforce rules to minimize conflicts of interest in the
decision-making process of the swap data repository.'' Commission
regulation 49.17(g) permits an SDR to disclose, consistent with Section
8 of the CEA, aggregated data information if such disclosure is not for
a commercial purpose. In sum, part 49 provides an SDR with an implied
license to use Core Data for regulatory purposes, and absent the
consent of the counterparties, an SDR would be prohibited from
commercially benefiting from the use of such Core Data. The Commission
is requesting industry and public input on whether the current
Commission regulations regarding ``commercialization'' of data are
consistent with legal property interests and industry practices.
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\51\ Core Data constitutes the two separate streams of data
received by SDRs: ``(i) Data related to real-time public reporting
which by its nature is publicly available and (ii) data that is
intended for use by the Commission and other regulators which is
subject to statutory confidential treatment.'' SDR Rules at 54550.
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Additionally, the Commission requests comment related to the
specific questions below.
64. The Commission seeks input from market participants regarding
the ownership of the transactional data resulting from a swap
transaction. Is the swap transaction data from a particular swap
transaction owned by the counterparties to the transaction?
a. If cleared, should a DCO have preferential ownership or
intellectual property rights to the data?
b. Should ownership or intellectual property rights change based on
whether the particular swap transaction is executed on a SEF or DCM?
c. What would be the basis for property rights in the data for each
of these scenarios?
d. What ownership interests, if any, are held by third-party
service providers?
e. What are the ownership interests of non-users/non-participants
of an SDR whose information is reported to the SDR by a reporting
counterparty or other reporting entity?
65. Is commercialization of swap transaction data consistent with
the regulatory objective of transparency?
a. In what circumstances should an SDR be permitted to
commercialize the data required to be reported to it?
b. Does commercialization of swap data increase potential data
fragmentation?
c. Is commercialization of swap data reported to an SDR, DCM or SEF
necessary for any such entity to be economically viable? If so, what
restraints or controls should be imposed on such commercialization?
66. Does the regulatory reporting of a swap transaction to an SDR
implicitly or explicitly provide ``consent'' to further distribution or
use of swap transaction data for commercial purpose by the SDR?
67. Even though swap data reported to an SDR must be available for
public real-time reporting, should any use of such real-time data or
commercialization of such data occur only with the specific consent of
the counterparties to the swap?
68. An ancillary issue relating to commercialization of data and
legal property rights relates to the ``portability'' of SDR data. This
issue relates to the operation of Commission regulation 45.10
(Reporting to a single SDR), which requires that all swap data for a
given swap must be reported to a single SDR, specifically, the SDR to
which creation data is first reported. The Commission did not, however,
directly address whether the data in one SDR may be moved, transferred
or ``ported'' to another SDR.\52\ The Commission seeks comment on
whether Sec. 45.10 should be re-evaluated and whether a viable
alternative exists. Should portability of data be permitted? If so,
should there be agreement by the counterparties to a swap prior to the
data being ported?
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\52\ The Commission did provide that SDR data could be
transferred or moved to another SDR in the case of an SDR ceasing to
operate as an SDR registered the Commission. See 17 CFR 49.4.
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J. Additional Comment
69. To the extent not addressed by any of the questions above,
please identify any challenges regarding: (i) The accurate reporting of
swap transaction data; (ii) efficient access to swap transaction data;
and (iii) effective analysis of swap transaction data. Please address
each issue and challenge as it pertains to reporting entities, SDRs,
and others. Please also discuss how such challenges can be resolved.
a. What challenges do Commission registrants (SDs, MSPs, SEFs,
DCMs, and DCOs) face as reporting entities and reporting counterparties
under the swap data reporting rules? What enhancements or
clarifications to the Commission's rules, if any, would help address
these challenges?
b. What challenges do financial entities face as reporting
counterparties and non-reporting counterparties under the swap data
reporting rules? What enhancements or clarifications to the
Commission's rules, if any, would help address these challenges?
c. What challenges do non-financial entities, including natural
persons, face as reporting counterparties and non-reporting
counterparties under the swap data reporting rules? What enhancements
or clarifications to the Commission's rules, if any, would help address
these challenges?
Issued in Washington, DC, on March 19, 2014, by the Commission.
Christopher J. Kirkpatrick,
Deputy Secretary of the Commission.
Appendices to Request for Comment on Part 45 and Related Provisions of
the Commission's Swap Data Reporting Rules
Appendix 1--Commission Voting Summary
On this matter, Acting Chairman Wetjen and Commissioners Chilton
and O'Malia voted in the affirmative. No Commissioner voted in the
negative.
Appendix 2--Statement of Commissioner Scott D. O'Malia
I support the request for comment on part 45 and related
provisions of the
[[Page 16698]]
Commission's swap data reporting rules. I commend the cross-
divisional data team's effort to fix our reporting rules and enhance
the Commission's ability to use its data. I hope that the data team
and the Commission will carefully evaluate market participants'
comments and recommendations and develop workable solutions to
improve our data reporting regime.
At the same time, I urge market participants to carefully review
the Commission's questions, submit their comments, and alert the
Commission to other data reporting issues that have not been
included in this request for comment. This comment period is a
critical step in the Commission's effort to improve its data
utilization. I encourage all market participants to help the
Commission improve its data reporting regime.
[FR Doc. 2014-06426 Filed 3-25-14; 8:45 am]
BILLING CODE 6351-01-P
